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The United States Securities and Exchange Commission (the "SEC") permits oil and gas companies, in their filings with the SEC, to disclose only proved probable and possible reserves. From time to time, we may use certain terms on this website or the documents contained herein, such as net unrisked mean resource potential, net unrisked resource potential, net resource, 2P resource, 2P net resource, net 2P resource, gross unrisked potential resource, gross resources, gross discovered resources, gross resource potential, gross block resource potential, resources, resource potential, potential resource, and other similar terms or variations of the foregoing terms. The SEC guidelines strictly prohibit us from including these terms in filings with the SEC. U.S. Investors are urged to consider closely the disclosures in our Forms 10-K, 10-Qs and 8-Ks, Commission File No. 1-5153, available from us at Marathon Oil Corporation, Attn. Investor Relations, 5555 San Felipe Street, Houston, TX 77056-2723. Our Form 10-K and other filings with the SEC can also be electronically accessed from our website or the SEC's website at http://www.sec.gov/.



<PAGE> 1

                                    FORM 10-Q

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549

(Mark One)

  [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
                                        
                For the Quarterly Period Ended September 30, 1996
                                        
                                       or
                                        
  [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

           For the transition period from ------------ to ------------
                                        
                                        
                                 USX CORPORATION
- --------------------------------------------------------------------------------
                                      ----
             (Exact name of registrant as specified in its charter)


           Delaware                  1-5153                 25-0996816
       ---------------            ------------         -------------------
       (State or other            (Commission             (IRS Employer
       jurisdiction of            File Number)         Identification No.)
        incorporation)

600 Grant Street, Pittsburgh, PA                            15219-4776
- ---------------------------------------                     ----------
(Address of principal executive offices)                    (Zip Code)

                                 (412) 433-1121
                         ------------------------------
                         (Registrant's telephone number,
                              including area code)


- --------------------------------------------------------------------------------


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes..X..No.....

Common stock outstanding at October 31, 1996 follows:

               USX-Marathon Group       -    287,504,043    shares
               USX-U. S. Steel Group    -     84,775,093    shares
               USX-Delhi Group          -      9,448,269    shares


<PAGE> 2

                                 USX CORPORATION
                                  SEC FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1996
                        --------------------------------

                                     INDEX                        Page
                                     -----                        ----

PART I - FINANCIAL INFORMATION

   A.  Consolidated Corporation


       Item 1. Financial Statements:

               Consolidated Statement of Operations                  4

               Consolidated Balance Sheet                            6

               Consolidated Statement of Cash Flows                  8

               Selected Notes to Consolidated
                 Financial Statements                                9

               Ratio of Earnings to Combined Fixed Charges
                 and Preferred Stock Dividends and Ratio of
                 Earnings to Fixed Charges                          14


       Item 2. Management's Discussion and Analysis of
                 Financial Condition and Results of
                 Operations                                         15

               Financial Statistics                                 21

   B.  Marathon Group


       Item 1. Financial Statements:

               Marathon Group Statement of Operations               22

               Marathon Group Balance Sheet                         23

               Marathon Group Statement of Cash Flows               24

               Selected Notes to Financial Statements               25


       Item 2. Marathon Group Management's Discussion and
                 Analysis of Financial Condition and
                 Results of Operations                              29

               Supplemental Statistics                              36

<PAGE> 3

                                 USX CORPORATION
                                  SEC FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1996
                        --------------------------------

                                     INDEX                        Page
                                     -----                        ----

PART I - FINANCIAL INFORMATION (Continued)

   C.  U. S. Steel Group


       Item 1. Financial Statements:

               U. S. Steel Group Statement of Operations            37

               U. S. Steel Group Balance Sheet                      38

               U. S. Steel Group Statement of Cash Flows            39

               Selected Notes to Financial Statements               40


       Item 2. U. S. Steel Group Management's Discussion
                 and Analysis of Financial Condition
                 and Results of Operations                          44

               Supplemental Statistics                              50

   D.  Delhi Group


       Item 1. Financial Statements:

               Delhi Group Statement of Operations                  51

               Delhi Group Balance Sheet                            52

               Delhi Group Statement of Cash Flows                  53

               Selected Notes to Financial Statements               54


       Item 2. Delhi Group Management's Discussion and
                 Analysis of Financial Condition
                 and Results of Operations                          58

               Supplemental Statistics                              63


PART II - OTHER INFORMATION


       Item 1. Legal Proceedings                                    64


       Item 5. Other Information                                    65


       Item 6. Exhibits and Reports on Form 8-K                     66

<PAGE> 4


Part I - Financial Information

   A.  Consolidated Corporation

<TABLE>
                    USX CORPORATION AND SUBSIDIARY COMPANIES
                CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
                ------------------------------------------------
<CAPTION>
                                                Third Quarter    Nine Months
                                                    Ended           Ended
                                                 September 30    September 30
(Dollars in millions)                            1996   1995*    1996    1995*
- --------------------------------------------------------------------------------
<S>                                             <C>     <C>    <C>      <C>
REVENUES                                        $6,023  $5,249 $17,333  $15,576

OPERATING COSTS:
 Cost of sales (excludes items shown below)      4,516   3,682  12,984   11,076
 Inventory market valuation charges (credits)      (96)     51    (179)     (35)
 Selling, general and administrative expenses       43      46     137      141
 Depreciation, depletion and amortization          243     292     765      882
 Taxes other than income taxes                     863     824   2,411    2,363
 Exploration expenses                               30      39      86       92
 Restructuring credits                               -       -       -       (6)
                                                ------  ------  ------   ------
   Total operating costs                         5,599   4,934  16,204   14,513
                                                ------  ------  ------   ------

OPERATING INCOME                                   424     315   1,129    1,063

Gain on affiliate stock offering                     -       -      53        -
Other income                                        21      25      70       75
Interest and other financial income                  7      10      19       27
Interest and other financial costs                (110)   (110)   (341)    (375)
                                                ------  ------  ------   ------
INCOME BEFORE INCOME TAXES AND
 EXTRAORDINARY LOSS                                342     240     930      790

Less provision for estimated income taxes          109      61     278      267
                                                ------  ------  ------   ------

INCOME BEFORE EXTRAORDINARY LOSS                   233     179     652      523
Extraordinary loss, net of income tax                -      (5)      -       (5)
                                                ------  ------  ------   ------

NET INCOME                                         233     174     652      518

Dividends on preferred stock                        (6)     (7)    (17)     (23)
                                                ------  ------  ------   ------
NET INCOME APPLICABLE TO COMMON STOCKS            $227    $167    $635     $495
                                                ======  ======  ======   ======




*Certain amounts have been reclassified to conform to 1996 classifications.

</TABLE>


Selected notes to financial statements appear on pages 9-13.

<PAGE> 5

<TABLE>
                    USX CORPORATION AND SUBSIDIARY COMPANIES
          CONSOLIDATED STATEMENT OF OPERATIONS (Continued) (Unaudited)
                             INCOME PER COMMON SHARE
          ------------------------------------------------------------
<CAPTION>
                                                Third Quarter    Nine Months
                                                    Ended           Ended
                                                 September 30    September 30
(Dollars in millions, except per share data)     1996    1995    1996     1995
- --------------------------------------------------------------------------------
<S>                                            <C>     <C>     <C>      <C>
APPLICABLE TO MARATHON STOCK:
 Income before extraordinary loss                 $164     $96    $504     $278
   - Per share - primary                           .57     .33    1.75      .97
            - fully diluted                        .57     .33    1.74      .97

 Extraordinary loss, net of income tax               -      (4)      -       (4)
   - Per share - primary and fully diluted           -    (.01)      -     (.01)

 Net income                                        164      92     504      274
   - Per share - primary                           .57     .32    1.75      .96
            - fully diluted                        .57     .32    1.74      .96

 Dividends paid per share                          .17     .17     .51      .51

 Weighted average shares, in thousands
   - Primary                                   287,608 287,408 287,557  287,281
   - Fully diluted                             296,640 287,423 296,590  287,292

APPLICABLE TO STEEL STOCK:
 Income before extraordinary loss                  $64     $80    $131     $222
   - Per share - primary                           .76     .99    1.56     2.86
 - fully diluted                                   .75     .95    1.55     2.77

 Extraordinary loss, net of income tax               -      (1)      -       (1)
   - Per share - primary and fully diluted           -    (.01)      -     (.01)

 Net income                                         64      79     131      221
   - Per share - primary                           .76     .98    1.56     2.85
 - fully diluted                                   .75     .94    1.55     2.76

 Dividends paid per share                          .25     .25     .75      .75

 Weighted average shares, in thousands
   - Primary                                    84,487  80,700  83,781   77,831
   - Fully diluted                              86,422  90,008  85,588   87,139

APPLICABLE TO OUTSTANDING DELHI STOCK:
 Income (loss) before extraordinary loss         $(1.2)  $(4.2)     $-     $(.2)
   - Per share - primary and fully diluted        (.14)   (.44)      -     (.02)

 Extraordinary loss, net of income tax               -     (.2)      -      (.2)
   - Per share - primary and fully diluted           -    (.02)      -     (.02)

 Net income (loss)                                (1.2)   (4.4)      -      (.4)
   - Per share - primary and fully diluted        (.14)   (.46)      -     (.04)

 Dividends paid per share                          .05     .05     .15      .15

 Weighted average shares, in thousands
   - Primary and fully diluted                   9,448   9,443   9,448    9,440
<FN>
Selected notes to financial statements appear on pages 9-13.
</TABLE>


<PAGE> 6

<TABLE>
                                        
                    USX CORPORATION AND SUBSIDIARY COMPANIES
                     CONSOLIDATED BALANCE SHEET (Unaudited)
                    ----------------------------------------
<CAPTION>
                                        
                                     ASSETS
                                                   September 30 December 31
(Dollars in millions)                                  1996         1995
- --------------------------------------------------------------------------------
<S>                                                  <C>           <C>
ASSETS
Current assets:
  Cash and cash equivalents                              $72          $131
  Receivables, less allowance for doubtful
   accounts of $21 and $22                             1,169         1,203
  Inventories                                          2,055         1,764
  Deferred income tax benefits                            60            76
  Other current assets                                    76            66
                                                      ------        ------
     Total current assets                              3,432         3,240
Long-term receivables and other investments,
 less reserves of $25 and $23                            753           836
Property, plant and equipment, less accumulated
 depreciation, depletion and amortization of
 $15,580 and $15,233                                  10,383        10,535
Prepaid pensions                                       1,977         1,820
Other noncurrent assets                                  306           312
                                                      ------        ------
     Total assets                                    $16,851       $16,743
                                                      ======        ======




























<FN>
Selected notes to financial statements appear on pages 9-13.
</TABLE>


<PAGE> 7

<TABLE>
                    USX CORPORATION AND SUBSIDIARY COMPANIES
               CONSOLIDATED BALANCE SHEET (Continued) (Unaudited)
               --------------------------------------------------
<CAPTION>
                                        
                      LIABILITIES AND STOCKHOLDERS' EQUITY
                                        
                                                   September 30 December 31
(Dollars in millions)                                  1996         1995
- --------------------------------------------------------------------------------
<S>                                                  <C>           <C>
LIABILITIES
Current liabilities:
  Notes payable                                         $290           $40
  Accounts payable                                     1,998         2,157
  Payroll and benefits payable                           426           473
  Accrued taxes                                          292           263
  Accrued interest                                        69           122
  Long-term debt due within one year                     234           465
                                                      ------        ------
     Total current liabilities                         3,309         3,520
Long-term debt, less unamortized discount              4,157         4,472
Long-term deferred income taxes                        1,031           898
Employee benefits                                      2,816         2,772
Deferred credits and other liabilities                   482           503
Preferred stock of subsidiary                            250           250
                                                      ------        ------
     Total liabilities                                12,045        12,415
                                                      ------        ------
STOCKHOLDERS' EQUITY
Preferred stock -
  6.50% Cumulative Convertible issued - 6,900,000 shares
   ($345 liquidation preference)                           7             7
Common stocks:
  Marathon Stock issued - 287,493,869 shares and
   287,398,342 shares                                    288           287
  Steel Stock issued - 84,711,924 shares and
   83,042,305 shares                                      85            83
  Delhi Stock issued - 9,448,269 shares and
   9,446,769 shares                                        9             9
Additional paid-in capital                             3,916         4,094
Retained earnings (deficit)                              536          (116)
Other equity adjustments                                 (35)          (36)
                                                      ------        ------
     Total stockholders' equity                        4,806         4,328
                                                      ------        ------
     Total liabilities and stockholders' equity      $16,851       $16,743
                                                      ======        ======










<FN>
Selected notes to financial statements appear on pages 9-13.
</TABLE>


<PAGE> 8

<TABLE>
                    USX CORPORATION AND SUBSIDIARY COMPANIES
                CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
                ------------------------------------------------
<CAPTION>
                                                       Nine Months Ended
                                                          September 30
(Dollars in millions)                                  1996         1995
- --------------------------------------------------------------------------------
<S>                                                     <C>           <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
OPERATING ACTIVITIES:
Net income                                              $652          $518
Adjustments to reconcile to net cash provided
 from operating activities:
  Extraordinary loss                                       -             5
  Depreciation, depletion and amortization               765           882
  Exploratory dry well costs                              38            37
  Inventory market valuation credits                    (179)          (35)
  Pensions                                              (157)         (312)
  Postretirement benefits other than pensions             25             2
  Deferred income taxes                                  192           170
  Gain on disposal of assets                             (39)          (25)
  Gain on affiliate stock offering                       (53)            -
  Payment of amortized discount on zero coupon debentures  -          (129)
  Restructuring credits                                    -            (6)
  Changes in:
     Current receivables - sold                            -           (10)
                         - operating turnover            (61)           (2)
     Inventories                                        (112)          (30)
     Current accounts payable and accrued expenses      (226)         (168)
  All other items - net                                   (2)          (45)
                                                      ------        ------
     Net cash provided from operating activities         843           852
                                                      ------        ------
INVESTING ACTIVITIES:
Capital expenditures                                    (730)         (658)
Disposal of assets                                       271            88
All other items - net                                     (1)           10
                                                      ------        ------
     Net cash used in investing activities              (460)         (560)
                                                      ------        ------
FINANCING ACTIVITIES:
Commercial paper and revolving credit arrangements- net  331           316
Other debt - repayments                                 (595)         (410)
Preferred stock redeemed                                   -          (105)
Common stock - issued                                     48           206
             - repurchased                                 -            (1)
Dividends paid                                          (226)         (223)
                                                      ------        ------
     Net cash used in financing activities              (442)         (217)
                                                      ------        ------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS     (59)           75
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR           131            48
                                                      ------        ------
CASH AND CASH EQUIVALENTS AT END OF PERIOD               $72          $123
                                                      ======        ======
Cash used in operating activities included:
  Interest and other financial costs paid (net of
   amount capitalized)                                 $(418)        $(529)
  Income taxes paid                                      (99)         (165)
<FN>
Selected notes to financial statements appear on pages 9-13.
</TABLE>


<PAGE> 9
                    USX CORPORATION AND SUBSIDIARY COMPANIES
               SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               ---------------------------------------------------
                                   (Unaudited)

 1.  The information furnished in these financial statements is unaudited but,
     in the opinion of management, reflects all adjustments necessary for a fair
     presentation of the results for the periods covered.  All such adjustments
     are of a normal recurring nature unless disclosed otherwise.  These
     financial statements, including selected notes, have been prepared in
     accordance with the applicable rules of the Securities and Exchange
     Commission and do not include all of the information and disclosures
     required by generally accepted accounting principles for complete financial
     statements.  Additional information is contained in the USX Annual Report
     on Form 10-K for the year ended December 31, 1995.

     Effective January 1, 1996, USX adopted Statement of Financial Accounting
     Standards No. 123, "Accounting for Stock-Based Compensation" (SFAS No.
     123), which establishes a fair value based method of accounting for
     employee stock-based compensation plans.  The Standard permits companies to
     continue to apply the provisions of Accounting Principles Board Opinion No.
     25, "Accounting for Stock Issued to Employees," provided certain pro forma
     disclosures are made.  USX will comply with SFAS No. 123 by disclosure only
     in its 1996 annual financial statements.

 2.  The method of calculating net income (loss) per share for the Marathon
     Stock, Steel Stock and Delhi Stock reflects the USX Board of Directors'
     intent that the separately reported earnings and surplus of the Marathon
     Group, the U. S. Steel Group and the Delhi Group, as determined consistent
     with the USX Certificate of Incorporation, are available for payment of
     dividends on the respective classes of stock, although legally available
     funds and liquidation preferences of these classes of stock do not
     necessarily correspond with these amounts.  The financial statements of the
     Marathon Group, the U. S. Steel Group and the Delhi Group, taken together,
     include all accounts which comprise the corresponding consolidated
     financial statements of USX.

     Primary net income (loss) per share is calculated by adjusting net income
     for dividend requirements of preferred stock and, in the case of Delhi
     Stock, for the income applicable to the Retained Interest prior to June 15,
     1995, the date USX eliminated the Marathon Group's Retained Interest in the
     Delhi Group; and is based on the weighted average number of common shares
     outstanding plus common stock equivalents, provided they are not
     antidilutive.  Common stock equivalents result from assumed exercise of
     stock options, where applicable.

     Fully diluted net income (loss) per share assumes conversion of convertible
     securities for the applicable periods outstanding and assumes exercise of
     stock options, provided in each case, the effect is not antidilutive.

 3.  The items below are included in both revenues and operating costs,
     resulting in no effect on income.

<TABLE>
<CAPTION>
                                                  (In millions)
                                        -------------------------------
                                                  Third Qtr.     Nine Months
                                                    Ended           Ended
                                                 September 30    September 30
                                                 1996    1995    1996     1995
                                                 ----    ----    ----     ----
    <S>                                           <C>     <C>   <C>      <C>
    Consumer excise taxes on petroleum
      products and merchandise                    $757    $718  $2,090   $2,046
    Matching crude oil and refined product
      buy/sell transactions settled in cash        706     447   2,028    1,499
</TABLE>


<PAGE> 10

                    USX CORPORATION AND SUBSIDIARY COMPANIES
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)
                                        

 4.  Operating income includes net periodic pension credits of $119 million and
     $107 million in the first nine months of 1996 and 1995, respectively,
     ($41 million and $35 million in the third quarter of 1996 and 1995,
     respectively).  These pension credits are primarily noncash and for the
     most part are included in selling, general and administrative expenses.
     The expected long-term rate of return on plan assets, which is reflected in
     the calculation of net periodic pension credits, is 10% for both 1996 and
     1995.

 5.  In 1994, restructuring charges totaling $40 million were reported for the
     write-down of assets to estimated net realizable value related to the
     planned disposition of certain nonstrategic gas gathering and processing
     assets and other investments.  In the second quarter of 1995, disposition
     of these assets was completed at higher than anticipated sales proceeds,
     resulting in restructuring credits of $11 million ($6 million included in
     operating income and $5 million included in other income).

 6.  On May 2, 1996, an aggregate of 6.9 million shares of RMI Titanium Company
     (RMI) common stock was sold in a public offering at a price of $18.50 per
     share and total net proceeds of $121 million.  Included in the offering
     were 2.3 million shares sold by USX for net proceeds of $40 million.  USX
     recognized a total pretax gain in the second quarter of 1996 of $53
     million, of which $34 million was attributable to the shares sold by USX
     and $19 million was attributable to the increase in value of USX's
     investment as a result of the shares sold by RMI.  The income tax effect
     related to the total gain was $19 million.  As a result of this
     transaction, USX's ownership in RMI decreased from approximately 50% to
     27%.  USX continues to account for its investment in RMI under the equity
     method of accounting.

 7.  The provision for estimated income taxes for the periods reported is based
     on tax rates and amounts which recognize management's best estimate of
     current and deferred tax assets and liabilities.

     The income tax provisions for the third quarter and first nine months of
     1995 include a credit of $23 million related to recognition of incremental
     federal income tax benefits for foreign income tax payments.  This benefit
     resulted from USX's election to credit, rather than deduct, certain foreign
     income taxes for federal income tax purposes in 1995 and certain prior
     years.  In addition, interest and other financial costs for the third
     quarter and first nine months of 1995 include a credit of $20 million for
     interest on refundable federal income taxes paid in prior years.

 8.  In the third quarter of 1995, USX extinguished $467 million of debt prior
     to maturity, primarily consisting of Zero Coupon Convertible Senior
     Debentures, with a carrying value of $393 million, and $56 million of 8-
     1/2% Sinking Fund Debentures, which resulted in an extraordinary loss of
     $5 million, net of a $3 million income tax benefit.

<PAGE> 11
                    USX CORPORATION AND SUBSIDIARY COMPANIES
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)

 9.  Inventories are carried at lower of cost or market.  Cost of inventories is
     determined primarily under the last-in, first-out (LIFO) method.

<TABLE>
<CAPTION>
                                                         (In millions)
                                                    ------------------------
                                                   September 30 December 31
                                                       1996         1995
                                                   ------------ -----------
    <S>                                               <C>          <C>
    Raw materials                                       $631         $609
    Semi-finished products                               329          300
    Finished products                                    981          901
    Supplies and sundry items                            144          163
                                                      ------       ------
      Total (at cost)                                  2,085        1,973
    Less inventory market valuation reserve               30          209
                                                      ------       ------
      Net inventory carrying value                    $2,055       $1,764
                                                      ======       ======
</TABLE>

     The inventory market valuation reserve reflects the extent that the
     recorded cost of crude oil and refined products inventories exceeds net
     realizable value.  The reserve is decreased to reflect increases in market
     prices and inventory turnover and increased to reflect decreases in market
     prices.  Changes in the inventory market reserve result in charges or
     credits to operating income.

10.  At September 30, 1996, USX had no borrowings against its $2,350 million
     long-term revolving credit agreement.  During the third quarter of 1996,
     the long-term revolving credit agreement was amended, increasing the
     facility by $25 million and extending its maturity by two years to August
     18, 2001.  At September 30, 1996, $275 million of commercial paper is
     supported by the $2,350 million in unused and available credit and,
     accordingly, is classified as long-term debt.

     USX had $50 million of borrowings at September 30, 1996, against its short-
     term lines of credit totaling $200 million, which require maintenance of
     compensating balances of 3%.  In addition, USX had other outstanding short-
     term borrowings of $240 million.

     In the event of a change in control of USX, debt obligations totaling
     $3,230 million at September 30, 1996, may be declared immediately due and
     payable.

11.  USX has agreements (the programs) to sell an undivided interest in certain
     accounts receivable subject to limited recourse.  Payments are collected
     from the sold accounts receivable; the collections are reinvested in new
     accounts receivable for the buyers; and a yield, based on defined short-
     term market rates, is transferred to the buyers.  At September 30, 1996,
     the amount sold under the programs that had not been collected was $740
     million, which will be forwarded to the buyers at the end of the
     agreements, or in the event of earlier contract termination.  If USX does
     not have a sufficient quantity of eligible accounts receivable to reinvest
     in for the buyers, the size of the programs will be reduced accordingly.
     The buyers have rights to a pool of receivables that must be maintained at
     a level of 110% to 115% of the programs' size.  In the event of a change in
     control of USX, as defined in one of the agreements, USX may be required to
     forward to the buyers, payments collected on sold accounts receivable of
     $350 million.

<PAGE> 12

                    USX CORPORATION AND SUBSIDIARY COMPANIES
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)


11.  (Continued)

     Prior to 1993, USX Credit, a division of USX, sold certain of its loans
     receivable subject to limited recourse.  USX Credit continues to collect
     payments from the loans and transfer to the buyers principal collected plus
     yield based on defined short-term market rates.  At September 30, 1996, the
     balance of sold loans receivable subject to recourse was $58 million.  USX
     Credit is not actively seeking new loans at this time.  In the event of a
     change in control of USX, as defined in the agreement, USX may be required
     to provide cash collateral in the amount of the uncollected loans
     receivable to assure compliance with the limited recourse provisions.

12.  USX is the subject of, or a party to, a number of pending or threatened
     legal actions, contingencies and commitments involving a variety of
     matters, including laws and regulations relating to the environment.
     Certain of these matters are discussed below.  The ultimate resolution of
     these contingencies could, individually or in the aggregate, be material to
     the consolidated financial statements.  However, management believes that
     USX will remain a viable and competitive enterprise even though it is
     possible that these contingencies could be resolved unfavorably.  See
     discussion of Liquidity in USX Consolidated Management's Discussion and
     Analysis of Financial Condition and Results of Operations.

     USX is subject to federal, state, local and foreign laws and regulations
     relating to the environment.  These laws generally provide for control of
     pollutants released into the environment and require responsible parties to
     undertake remediation of hazardous waste disposal sites.  Penalties may be
     imposed for noncompliance.  At September 30, 1996, and December 31, 1995,
     accrued liabilities for remediation totaled $150 million and $153 million,
     respectively.  It is not presently possible to estimate the ultimate amount
     of all remediation costs that might be incurred or the penalties that may
     be imposed.  Receivables for recoverable costs from certain states, under
     programs to assist companies in cleanup efforts related to underground
     storage tanks at retail marketing outlets, were $23 million at September
     30, 1996, and $22 million at December 31, 1995.

     For a number of years, USX has made substantial capital expenditures to
     bring existing facilities into compliance with various laws relating to the
     environment.  In the first nine months of 1996 and for the years 1995 and
     1994, such capital expenditures totaled $104 million, $111 million and $132
     million, respectively.  USX anticipates making additional such expenditures
     in the future; however, the exact amounts and timing of such expenditures
     are uncertain because of the continuing evolution of specific regulatory
     requirements.

     At September 30, 1996, and December 31, 1995, accrued liabilities for
     platform abandonment and dismantlement totaled $136 million and $128
     million, respectively.


<PAGE> 13

                    USX CORPORATION AND SUBSIDIARY COMPANIES
         SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
         ---------------------------------------------------------------
                                   (Unaudited)


12.  (Continued)

     Guarantees by USX of the liabilities of affiliated entities totaled
     $51 million at September 30, 1996.  In the event that any defaults of
     guaranteed liabilities occur, USX has access to its interest in the assets
     of most of the affiliates to reduce losses resulting from these guarantees.
     As of September 30, 1996, the largest guarantee for a single affiliate was
     $18 million.

     At September 30, 1996, USX's pro rata share of obligations of LOOP INC. and
     various pipeline affiliates secured by throughput and deficiency agreements
     totaled $176 million.  Under the agreements, USX is required to advance
     funds if the affiliates are unable to service debt.  Any such advances are
     prepayments of future transportation charges.

     Contract commitments for capital expenditures for property, plant and
     equipment at September 30, 1996, totaled $442 million compared with $299
     million at December 31, 1995.



<PAGE> 14

<TABLE>

                                 USX CORPORATION
           COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
                          AND PREFERRED STOCK DIVIDENDS
                      TOTAL ENTERPRISE BASIS - (Unaudited)
           ----------------------------------------------------------
<CAPTION>
                                        

  Nine Months Ended
     September 30                        Year Ended December 31
- --------------------    -------------------------------------------------------

   1996        1995         1995        1994         1993        1992      1991
   ----        ----         ----        ----         ----        ----      ----
   <C>         <C>          <C>         <C>          <C>         <C>       <C>
   3.29        2.65         1.50        1.92         (a)         (a)       (a)
   ====        ====         ====        ====         ====        ====      ====

<FN>
  (a) Earnings did not cover combined fixed charges and preferred stock
      dividends by $325 million for 1993, by $211 million for 1992 and by $696
      million for 1991.



</TABLE>


<TABLE>
                                 USX CORPORATION
                COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
                      TOTAL ENTERPRISE BASIS - (Unaudited)
                -------------------------------------------------
<CAPTION>

  Nine Months Ended
     September 30                        Year Ended December 31
- ---------------------   -------------------------------------------------------

   1996        1995         1995        1994         1993        1992      1991
   ----        ----         ----        ----         ----        ----      ----
   <C>        <C>           <C>         <C>          <C>         <C>       <C>
   3.53       2.88          1.63        2.08         (a)         (a)       (a)
   ====        ====         ====        ====         ====        ====      ====

<FN>
  (a) Earnings did not cover fixed charges by $281 million for 1993, by $197
      million for 1992 and by $681 million for 1991.
</TABLE>



<PAGE> 15
                    USX CORPORATION AND SUBSIDIARY COMPANIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------


     The following discussion should be read in conjunction with the third
quarter 1996 USX consolidated financial statements and selected notes.  For
income per common share amounts applicable to each of USX's three classes of
common stock (Marathon Stock, Steel Stock and Delhi Stock), see Consolidated
Statement of Operations - Income per Common Share.  For Group results, see

Management's Discussion and Analysis of Financial Condition and Results of
Operations for the Marathon Group, the U. S. Steel Group and the Delhi Group.
For operating statistics, see Supplemental Statistics following Management's
Discussion and Analysis of Financial Condition and Results of Operations for the
respective Groups.

     Certain sections of the discussion include forward-looking statements
concerning trends or events potentially affecting USX.  These statements
typically contain words such as "anticipates", "believes", "estimates",
"expects" or similar words indicating that future outcomes are uncertain.  In
accordance with "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995, these statements are accompanied by cautionary language
identifying important factors, though not necessarily all such factors, that
could cause future outcomes to differ materially from those set forth in
forward-looking statements.  USX included in Forms 8-K dated September 24,
1996 (for the Marathon Group) and October 23, 1996 (for USX and each of its
Groups), cautionary language identifying important factors with respect to
written forward-looking statements in USX external documents, and oral
forward-looking statements made by, or on behalf of USX, its representatives
and its individual Groups.

Results of Operations
- ---------------------

     Revenues increased by $774 million, or 15%, in the third quarter of 1996 as
compared with the third quarter of 1995.  The improvement reflected increases of
17% for the Marathon Group (excluding matching buy/sell transactions and
consumer excise taxes which are included in both revenues and operating costs,
resulting in no effect on operating income) due mainly to higher average prices
for refined products, worldwide liquid hydrocarbons and natural gas, and 62% for
the Delhi Group due mainly to higher natural gas prices, and increased trading
volumes (which usually provide substantially lower gross margins than those
provided by the Delhi Group's merchant gas business).  These factors were
partially offset by a decline of 1% for the U. S. Steel Group.

     Revenues increased by $1,757 million, or 11%, in the first nine months of
1996 as compared with the first nine months of 1995, due primarily to the
factors described above.  The improvement reflected increases of 14% for the
Marathon Group and 71% for the Delhi Group, partially offset by a decline of 1%
for the U. S. Steel Group.

     Operating income increased by $109 million, or 35%, in the third quarter of
1996 as compared with the third quarter of 1995 and by $66 million, or 6%, in
the first nine months of 1996 as compared with the first nine months of 1995.


<PAGE> 16
                    USX CORPORATION AND SUBSIDIARY COMPANIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     Operating income and certain items included in operating income for the
third quarter and first nine months of 1996 and 1995 are set forth in the
following table:

<TABLE>
<CAPTION>
                                                Third Quarter    Nine Months
                                                    Ended           Ended
                                                 September 30    September 30
(Dollars in millions)                            1996    1995    1996     1995
- --------------------------------------------------------------------------------
<S>                                               <C>     <C>   <C>      <C>
Operating Income                                  $424    $315  $1,129   $1,063

Less: Certain Favorable (Unfavorable) Items

 Inventory Market Valuation Reserve Adj. (a)        96     (51)    179       35
 Environmental Remediation Recoveries                -      15       -       15
 Charges for withdrawal from MPA (b)                 -       -     (10)       -
 Effects related to a Disposition Plan (c)           -       -       -        6
 Gary Works No. 13 Blast Furnace Repairs (d)         -       -     (39)       -
 Gary Works No. 8 Blast Furnace Repairs (e)          -      (6)      -      (33)
 Adjustments for Certain Employee Related Costs      -      13       -       13
 Certain Legal Accruals                              -       -     (20)     (29)
                                                ------  ------  ------   ------
 Subtotal                                           96     (29)    110        7

Adjusted Operating Income                         $328    $344  $1,019   $1,056
                                                ======  ======  ======   ======
<FN>
(a) The inventory market valuation reserve reflects the extent to which the
    recorded costs of crude oil and refined product inventories exceed net
    realizable value.
(b) Marine Preservation Association ("MPA") is a non-profit oil spill response
    group.
(c) Related to the planned disposition of certain nonstrategic gas gathering and
    processing assets.
(d) Reflects repair of damages incurred during a hearth break-out on April 2,
    1996; excludes effects of business interruption.
(e) Reflects repair of damages incurred in an explosion on April 5, 1995;
    excludes effects of business interruption.
</TABLE>

     Excluding effects of items detailed in the table above, operating income
decreased by $16 million, or 5%, in the third quarter of 1996 as compared with
the third quarter of 1995, due primarily to a decline of $35 million for the
U. S. Steel Group, partially offset by increases of $13 million for the Marathon
Group and $6 million for the Delhi Group.  The decline for the U. S. Steel Group
mainly reflected cost effects and inefficiencies related to planned and
unplanned blast furnace outages, reduced shipment volumes, and lower steel
prices, partially offset by improved product mix.  The increase for the Marathon
Group primarily reflected higher prices for worldwide liquid hydrocarbons and
natural gas, partially offset by lower refined product margins and decreased
volumes for worldwide liquid hydrocarbons.

     Excluding effects of items detailed in the table above, operating income
decreased by $37 million, or 3%, in the first nine months of 1996 as compared
with the first nine months of 1995, due primarily to a decline of $220 million
for the U. S. Steel Group, partially offset by increases of $174 million for the
Marathon Group and $9 million for the Delhi Group.

     Gain on affiliate stock offering totaled $53 million for the first nine
months of 1996.  For further details, see Note 6 to the Consolidated Financial
Statements.

<PAGE> 17
                    USX CORPORATION AND SUBSIDIARY COMPANIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     Other income in the first nine months of 1996 included gains of $22 million
on disposal of assets, mainly related to the sale of the Marathon Group's equity
interest in a domestic pipeline company.  Other income in the third quarter and
first nine months of 1995 included gains of $2 million on disposal of assets.
Excluding these gains, other income declined by $25 million, primarily due to
lower income from affiliates.

     Net interest and other financial costs decreased by $26 million in the
first nine months of 1996 as compared with the first nine months of 1995.  Net
financial costs in the first nine months of 1995 were reduced by $20 million for
interest on refundable federal income taxes paid in prior years.  Excluding the
effect of this item, net interest and other financial costs decreased by $46
million, primarily due to lower average debt levels.

     Provision for estimated income taxes of $61 million and $267 million for
the third quarter and first nine months of 1995 included a $23 million credit
related to recognition of incremental U.S. federal income tax benefits for
foreign income tax payments in 1995 and certain prior years.

     Net income increased by $59 million, or 34%, in the third quarter of 1996
as compared with the third quarter of 1995, and by $134 million, or 26%, in the
first nine months of 1996 as compared with the first nine months of 1995.

Outlook
- -------

     See Outlook in Management's Discussion and Analysis of Financial Condition
and Results of Operations for the Marathon Group, the U. S. Steel Group and the
Delhi Group.

Dividends to Stockholders
- -------------------------
     On October 29, 1996, the USX Board of Directors (the "Board") declared
dividends of 19 cents per share on Marathon Stock (an increase of two cents per
share over the previous quarterly dividend), 25 cents per share on Steel Stock
and five cents per share on Delhi Stock, all payable, December 10, 1996, to
stockholders of record at the close of business on November 20, 1996.

     The Board also declared a dividend of $0.8125 per share on USX
Corporation's 6.5% Cumulative Convertible Preferred Stock, payable December 31,
1996, to stockholders of record at the close of business on December 2, 1996.

Cash Flows
- ----------
     Cash and cash equivalents totaled $72 million at September 30, 1996,
compared with $131 million at December 31, 1995.

     Net cash provided from operating activities totaled $843 million in the
first nine months of 1996, compared with $852 million in the first nine months
of 1995.  The 1996 period included payments of $59 million to the Internal
Revenue Service for certain agreed and unagreed adjustments relating to the 1990
tax year, $39 million related to certain state tax issues and $28 million for
final settlement of the Pickering v. USX litigation.  The 1995 period included
payments of $169 million to fund the U. S. Steel Group's principal pension plan
for the 1994 and a portion of the 1995 plan years, $129 million representing the
amortized discount portion of zero

<PAGE> 18
                    USX CORPORATION AND SUBSIDIARY COMPANIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

coupon bond debentures extinguished, and $20 million for partial settlement of
the Pickering v. USX litigation.  Excluding the effects of these items, net cash
provided from operating activities decreased by $201 million mainly due to other
working capital changes, cost inefficiencies related to planned and unplanned
blast furnace outages and lower steel prices and volumes, partially offset by
improved steel product mix, higher average prices for worldwide liquid
hydrocarbons and domestic natural gas, increased volumes for worldwide natural
gas, and lower interest payments.

     Cash from the disposal of assets was $271 million in the first nine months
of 1996, compared with $88 million in the first nine months of 1995.  The 1996
proceeds primarily reflected the sale of the U. S. Steel Group's investment in
National- Oilwell (an oil field service joint venture); the sale of shares of
RMI Titanium Company Common Stock; sales of the Marathon Group's interests in
oil and gas production properties in Indonesia and Tunisia and the sale of the
Marathon Group's equity interest in a domestic pipeline company.  The 1995
proceeds primarily reflected property sales.

     Capital expenditures for property, plant and equipment in the first nine
months of 1996 were $730 million, compared with $658 million in the first nine
months of 1995.  For further details, see USX Corporation - Financial
Statistics, following Management's Discussion and Analysis of Financial
Condition and Results of Operations.

     Capital expenditures for the year 1996 are expected to total approximately
$1,150 million.  Future capital expenditures can be affected by industry supply
and demand factors, levels of cash flow from operations for each of the Groups,
and by unforeseen hazards such as weather conditions, explosions or fires, or by
delays in obtaining government or partner approval, which could affect the
timing of completion of particular capital projects.  For details, see
discussion of Capital Expenditures for the Marathon Group, the U. S. Steel Group
and the Delhi Group.  Contract commitments for capital expenditures were $442
million at September 30, 1996, compared with $299 million at December 31, 1995.

     USX's total long-term debt, preferred stock of subsidiary and notes
payable, was $4,931 million at September 30, 1996, down $296 million from
December 31, 1995, mainly reflecting cash flows provided from operations and
asset sales, and the reduction in cash and cash equivalents discussed above.
Long-term maturities and redemptions included Swiss Franc Bonds due 1996 and
related obligations, Marathon 9-3/4% Guaranteed Notes due 1999, Series B Medium-
Term Notes and Private Placement Senior Notes.  At September 30, 1996, USX had
no outstanding borrowings against its $2,350 million long-term revolving credit
agreement.  During the third quarter of 1996, this agreement was amended,
increasing the facility by $25 million and extending the maturity by two years
to August 18, 2001.  At September 30, 1996, USX had $50 million of outstanding
borrowings against its short-term lines of credit totaling $200 million which
require maintenance of compensating balances of 3%, and no outstanding
borrowings against its short-term credit agreements of $175 million which
require facility fees.  USX had other outstanding short-term borrowings of $240
million of uncommitted credit lines.


<PAGE> 19
                    USX CORPORATION AND SUBSIDIARY COMPANIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

Liquidity
- ---------
     USX management believes that its short-term and long-term liquidity is
adequate to satisfy its obligations as of September 30, 1996, and to complete
currently authorized capital spending programs.  Future requirements for USX's
business needs, including the funding of capital expenditures, debt maturities
for the balance of 1996 and years 1997 and 1998, and any amounts that may
ultimately be paid in connection with contingencies (which are discussed in Note
12 to the Consolidated Financial Statements), are expected to be financed by a
combination of internally generated funds, proceeds from the sale of stock,
borrowings and other external financing sources.  USX's ability to avail itself
of these financing options in the future is affected by the performance of each
of its Groups, and with respect to borrowings, by the levels of outstanding
debt, credit ratings by investor services and the overall U. S. financial
climate.

Environmental Matters, Contingencies and Commitments
- ----------------------------------------------------
     USX has incurred and will continue to incur substantial capital, operating
and maintenance, and remediation expenditures as a result of environmental laws
and regulations.  To the extent these expenditures, as with all costs, are not
ultimately reflected in the prices of USX's products and services, operating
results will be adversely affected.  USX believes that domestic competitors of
the U. S. Steel Group and substantially all the competitors of the Marathon
Group and the Delhi Group are subject to similar environmental laws and
regulations.  However, the specific impact on each competitor may vary depending
on a number of factors, including the age and location of its operating
facilities, marketing areas, production processes and the specific products and
services it provides.

     USX has been notified that it is a potentially responsible party ("PRP") at
45 waste sites under the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA") as of September 30, 1996.  In addition, there are 29
sites where USX has received information requests or other indications that USX
may be a PRP under CERCLA but where sufficient information is not presently
available to confirm the existence of liability.  There are also 106 additional
sites, excluding retail marketing outlets, where remediation is being sought
under other environmental statutes, both federal and state.  At many of these
sites, USX is one of a number of parties involved and the total cost of
remediation, as well as USX's share thereof, is frequently dependent upon the
outcome of investigations and remedial studies.  USX accrues for environmental
remediation activities when the responsibility to remediate is probable and the
amount of associated costs is reasonably determinable.  As
environmental remediation matters proceed toward ultimate resolution or as
additional remediation obligations arise, charges in excess of those previously
accrued may be required.  See Note 12 to the Consolidated Financial Statements.

     USX is the subject of, or a party to, a number of pending or threatened
legal actions, contingencies and commitments involving a variety of matters,
including laws and regulations relating to the environment (see Note 12 to the
Consolidated Financial Statements for a discussion of certain of these matters).
In the U.S. District Court for the Northern District of Alabama, in a civil
class action, Cox, et al. v. USX, the United Steel Workers of America and United
States Steel and Carnegie Pension Fund (defendants), a jury on October 29, 1996,
returned verdicts favorable to the defendants on all counts, finding no
liability and no damages. Plaintiffs have indicated an intent to appeal these
verdicts.


<PAGE> 20
                    USX CORPORATION AND SUBSIDIARY COMPANIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     The ultimate resolution of these contingencies could, individually or in
the aggregate, be material to the consolidated financial statements.  However,
management believes that USX will remain a viable and competitive enterprise
even though it is possible that these contingencies could be resolved
unfavorably.  See discussion of Cash Flows and Liquidity herein.

<PAGE> 21

<TABLE>
                                 USX CORPORATION
                              FINANCIAL STATISTICS
                              --------------------
<CAPTION>
                                        

                                                Third Quarter    Nine Months
                                                    Ended           Ended
                                                 September 30    September 30
(Dollars in millions)                            1996    1995    1996     1995
- --------------------------------------------------------------------------------
SALES

 <C>      <S>                                   <C>     <C>    <C>      <C>
 Marathon Group                                 $4,195  $3,494 $11,893  $10,362
 U. S. Steel Group                               1,611   1,620   4,782    4,827
 Delhi Group                                       242     149     727      426
 Eliminations                                      (25)    (14)    (69)     (39)
                                                ------  ------ -------  -------
   Total                                        $6,023  $5,249 $17,333  $15,576

OPERATING INCOME

 Marathon Group                                   $318    $173    $929     $636
 U. S. Steel Group                                 103     145     185      415
 Delhi Group                                         3      (3)     15       12
                                                ------  ------  ------   ------
   Total                                          $424    $315  $1,129   $1,063


CAPITAL EXPENDITURES

 Marathon Group                                   $176    $151    $426     $409
 U. S. Steel Group                                  91      82     249      224
 Delhi Group                                        13      12      55       25
                                                ------  ------  ------   ------
   Total                                          $280    $245    $730     $658
</TABLE>


<PAGE> 22

Part I - Financial Information (Continued):

<TABLE>
   B.  Marathon Group
                        MARATHON GROUP OF USX CORPORATION
                       STATEMENT OF OPERATIONS (Unaudited)
                       -----------------------------------
<CAPTION>
                                                Third Quarter    Nine Months
                                                    Ended           Ended
                                                 September 30    September 30
(Dollars in millions, except per share data)     1996   1995*    1996    1995*
- --------------------------------------------------------------------------------
<S>                                            <C>     <C>     <C>      <C>
REVENUES                                        $4,195  $3,494 $11,893  $10,362

OPERATING COSTS:
 Cost of sales (excludes items shown below)      2,895   2,185   8,067    6,624
 Inventory market valuation charges (credits)      (96)     51    (179)     (35)
 Selling, general and administrative expenses       77      74     237      226
 Depreciation, depletion and amortization          167     207     522      623
 Taxes other than income taxes                     804     765   2,231    2,196
 Exploration expenses                               30      39      86       92
                                                ------  ------  ------   ------
   Total operating costs                         3,877   3,321  10,964    9,726
                                                ------  ------  ------   ------

OPERATING INCOME                                   318     173     929      636

Other income                                         1       1      29       11
Interest and other financial income                  7      11      16       24
Interest and other financial costs                 (75)    (73)   (238)    (258)
                                                ------  ------  ------   ------

INCOME BEFORE INCOME TAXES AND
 EXTRAORDINARY LOSS                                251     112     736      413

Less provision for estimated income taxes           87      15     232      131
                                                ------  ------  ------   ------

INCOME BEFORE EXTRAORDINARY LOSS                   164      97     504      282
Extraordinary loss, net of income tax                -      (4)      -       (4)
                                                ------  ------  ------   ------

NET INCOME                                         164      93     504      278
Dividends on preferred stock                         -      (1)      -       (4)
                                                ------  ------  ------   ------
NET INCOME APPLICABLE TO MARATHON STOCK           $164     $92    $504     $274
                                                ======  ======  ======   ======

MARATHON STOCK DATA:
 Income per share:
   Income before extraordinary loss
    - Primary                                     $.57    $.33   $1.75     $.97
    - Fully diluted                                .57     .33    1.74      .97
   Extraordinary loss - primary and fully diluted    -    (.01)      -     (.01)
   Net income
    - Primary                                      .57     .32    1.75      .96
    - Fully diluted                                .57     .32    1.74      .96

 Dividends paid per share                          .17     .17     .51      .51

 Weighted average shares, in thousands
    - Primary                                  287,608 287,408 287,557  287,281
    - Fully diluted                            296,640 287,423 296,590  287,292
<FN>
*Certain amounts have been reclassified to conform to 1996 classifications.

Selected notes to financial statements appear on pages 25-28.
</TABLE>


<PAGE> 23

<TABLE>
                        MARATHON GROUP OF USX CORPORATION
                            BALANCE SHEET (Unaudited)
                        ---------------------------------
<CAPTION>
                                        
                                                   September 30 December 31
(Dollars in millions)                                  1996         1995
- --------------------------------------------------------------------------------
<S>                                                  <C>           <C>
ASSETS
Current assets:
  Cash and cash equivalents                              $51           $77
  Receivables, less allowance for doubtful
   accounts of $2 and $3                                 603           541
  Receivable from other groups                             -            11
  Inventories                                          1,321         1,152
  Other current assets                                   116           107
                                                      ------        ------
     Total current assets                              2,091         1,888
Long-term receivables and other investments              206           215
Property, plant and equipment, less accumulated
 depreciation, depletion and amortization of
 $9,086 and $8,890                                     7,309         7,521
Prepaid pensions                                         286           274
Other noncurrent assets                                  211           211
                                                      ------        ------
     Total assets                                    $10,103       $10,109
                                                      ======        ======
LIABILITIES
Current liabilities:
  Notes payable                                         $206           $31
  Accounts payable                                     1,191         1,210
  Payable to other groups                                 41            35
  Payroll and benefits payable                            83            80
  Accrued taxes                                           90            68
  Deferred income taxes                                  207           154
  Accrued interest                                        49            94
  Long-term debt due within one year                     175           353
                                                      ------        ------
     Total current liabilities                         2,042         2,025
Long-term debt, less unamortized discount              2,883         3,367
Long-term deferred income taxes                        1,161         1,072
Employee benefits                                        353           338
Deferred credits and other liabilities                   250           253
Preferred stock of subsidiary                            182           182
                                                      ------        ------
     Total liabilities                                 6,871         7,237


STOCKHOLDERS' EQUITY                                   3,232         2,872
                                                      ------        ------
     Total liabilities and stockholders' equity      $10,103       $10,109
                                                      ======        ======





<FN>
Selected notes to financial statements appear on pages 25-28.
</TABLE>


<PAGE> 24

<TABLE>
                        MARATHON GROUP OF USX CORPORATION
                       STATEMENT OF CASH FLOWS (Unaudited)
                       -----------------------------------
<CAPTION>
                                                       Nine Months Ended
                                                          September 30
(Dollars in millions)                                  1996         1995
- --------------------------------------------------------------------------------
<S>                                                     <C>           <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
OPERATING ACTIVITIES:
Net income                                              $504          $278
Adjustments to reconcile to net cash provided from
 operating activities:
  Extraordinary loss                                       -             4
  Depreciation, depletion and amortization               522           623
  Exploratory dry well costs                              38            37
  Inventory market valuation credits                    (179)          (35)
  Pensions                                               (12)          (24)
  Postretirement benefits other than pensions             11             8
  Deferred income taxes                                  134            18
  Payment of amortized discount on zero coupon debentures  -           (96)
  Gain on disposal of assets                             (31)           (5)
  Changes in:
     Current receivables - sold                            -             8
                         - operating turnover           (112)          (72)
     Inventories                                          10            26
     Current accounts payable and accrued expenses         3          (253)
  All other items - net                                    2            60
                                                      ------        ------
     Net cash provided from operating activities         890           577
                                                      ------        ------
INVESTING ACTIVITIES:
Capital expenditures                                    (426)         (409)
Disposal of assets                                       126            18
Elimination of Retained Interest in Delhi Group            -            58
All other items - net                                    (11)           (4)
                                                      ------        ------
     Net cash used in investing activities              (311)         (337)
                                                      ------        ------
FINANCING ACTIVITIES:
Increase (decrease)in Marathon Group's share of USX
 consolidated debt                                      (459)           23
Preferred stock redeemed                                   -           (78)
Marathon Stock issued                                      1             -
Common stock repurchased                                   -            (1)
Dividends paid                                          (147)         (151)
                                                      ------        ------
     Net cash used in financing activities              (605)         (207)
                                                      ------        ------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS     (26)           33
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR            77            28
                                                      ------        ------
CASH AND CASH EQUIVALENTS AT END OF PERIOD               $51           $61
                                                      ======        ======
Cash used in operating activities included:
  Interest and other financial costs paid (net of
   amount capitalized)                                 $(295)        $(380)
  Income taxes paid, including settlements with other
   groups                                                (44)         (158)
<FN>
Selected notes to financial statements appear on pages 25-28.
</TABLE>


<PAGE> 25

                        MARATHON GROUP OF USX CORPORATION
                     SELECTED NOTES TO FINANCIAL STATEMENTS
                     --------------------------------------
                                   (Unaudited)


 1.  The information furnished in these financial statements is unaudited but,
     in the opinion of management, reflects all adjustments necessary for a fair
     presentation of the results for the periods covered.  All such adjustments
     are of a normal recurring nature unless disclosed otherwise.  These
     financial statements, including selected notes, have been prepared in
     accordance with the applicable rules of the Securities and Exchange
     Commission and do not include all of the information and disclosures
     required by generally accepted accounting principles for complete financial
     statements.  Additional information is contained in the USX Annual Report
     on Form 10-K for the year ended December 31, 1995.

 2.  The financial statements of the Marathon Group include the financial
     position, results of operations and cash flows for the businesses of
     Marathon Oil Company and certain other subsidiaries of USX, and a portion
     of the corporate assets and liabilities and related transactions which are
     not separately identified with ongoing operating units of USX.  These
     financial statements are prepared using the amounts included in the USX
     consolidated financial statements.  Corporate amounts reflected in these
     financial statements are determined based upon methods which management
     believes to be reasonable.  The accounting policies applicable to the
     preparation of the financial statements of the Marathon Group may be
     modified or rescinded in the sole discretion of the Board of Directors of
     USX (Board), although the Board has no present intention to do so.  The
     Board may also adopt additional policies depending on the circumstances.

     Although the financial statements of the Marathon Group, the U. S. Steel
     Group and the Delhi Group separately report the assets, liabilities
     (including contingent liabilities) and stockholders' equity of USX
     attributed to each such group, such attribution of assets, liabilities
     (including contingent liabilities) and stockholders' equity among the
     Marathon Group, the U. S. Steel Group and the Delhi Group for the purpose
     of preparing their respective financial statements does not affect legal
     title to such assets and responsibility for such liabilities.  Holders of
     USX-Marathon Group Common Stock (Marathon Stock), USX-U. S. Steel Group
     Common Stock (Steel Stock) and USX-Delhi Group Common Stock (Delhi Stock)
     are holders of common stock of USX and continue to be subject to all the
     risks associated with an investment in USX and all of its businesses and
     liabilities.  Financial impacts arising from one Group that affect the
     overall cost of USX's capital could affect the results of operations and
     financial condition of other groups.  In addition, net losses of any Group,
     as well as dividends or distributions on any class of USX Common Stock or
     series of Preferred Stock and repurchases of any class of USX Common Stock
     or series of Preferred Stock at prices in excess of par or stated value,
     will reduce the funds of USX legally available for payment of dividends on
     all classes of Common Stock.  Accordingly, the USX consolidated financial
     information should be read in connection with the Marathon Group financial
     information.


<PAGE> 26
                        MARATHON GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)

 3.  The method of calculating net income (loss) per share for the Marathon
     Stock, Steel Stock and Delhi Stock reflects the Board's intent that the
     separately reported earnings and surplus of the Marathon Group, the
     U. S. Steel Group and the Delhi Group, as determined consistent with the
     USX Certificate of Incorporation, are available for payment of dividends on
     the respective classes of stock, although legally available funds and
     liquidation preferences of these classes of stock do not necessarily
     correspond with these amounts.

     Primary net income per share is calculated by adjusting net income for
     dividend requirements of preferred stock and is based on the weighted
     average number of common shares outstanding plus common stock equivalents,
     provided they are not antidilutive.  Common stock equivalents result from
     assumed exercise of stock options, where applicable.

     Fully diluted net income per share assumes conversion of convertible
     securities for the applicable periods outstanding and assumes exercise of
     stock options provided, in each case, the effect is not antidilutive.

 4.  The items below are included in both revenues and operating costs,
     resulting in no effect on income.

<TABLE>
<CAPTION>
                                                  (In millions)
                                        -------------------------------
                                                  Third Qtr.     Nine Months
                                                    Ended           Ended
                                                 September 30    September 30
                                                 1996    1995    1996     1995
                                                 ----    ----    ----     ----
    <S>                                           <C>     <C>   <C>      <C>
    Consumer excise taxes on petroleum
      products and merchandise                    $757    $718  $2,090   $2,046
    Matching crude oil and refined product
      buy/sell transactions settled in cash        706     447   2,028    1,499
</TABLE>

 5.  Other income in the first nine months of 1996 included a gain of
     $20 million, primarily related to the sale of an equity interest in a
     domestic pipeline company.

 6.  The financial statement provision for estimated income taxes and related
     tax payments or refunds have been reflected in the Marathon Group, the U.
     S. Steel Group and the Delhi Group financial statements in accordance with
     USX's tax allocation policy for such groups.  In general, such policy
     provides that the consolidated tax provision and related tax payments or
     refunds are allocated among the Marathon Group, the U. S. Steel Group and
     the Delhi Group for group financial statement purposes, based principally
     upon the financial income, taxable income, credits, preferences and other
     amounts directly related to the respective groups.

     The provision for estimated income taxes for the Marathon Group is based on
     tax rates and amounts which recognize management's best estimate of current
     and deferred tax assets and liabilities.  Differences between the combined
     interim tax provisions of the Marathon, U. S. Steel and Delhi Groups and
     USX consolidated are allocated to each group based on the relationship of
     the individual group provisions to the combined interim provisions.

     The first nine months of 1996 provision for estimated income taxes included
     an $8 million tax benefit related to the sale of stock of certain
     subsidiaries involved in international production activities.

<PAGE> 27

                        MARATHON GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)


 6.  (Continued)

     The income tax provisions for the third quarter and first nine months of
     1995 include a credit of $29 million related to recognition of incremental
     federal income tax benefits for foreign income tax payments.  This benefit
     resulted from USX's election to credit, rather than deduct, certain foreign
     income taxes for federal income tax purposes in 1995 and certain prior
     years.  In addition, interest and other financial costs for the third
     quarter and first nine months of 1995 include a credit of $17 million for
     interest on refundable federal income taxes paid in prior years.

 7.  In the third quarter of 1995, USX extinguished $467 million of debt prior
     to maturity, resulting in an extraordinary loss to the Marathon Group of $4
     million, net of a $2 million income tax benefit.

 8.  Inventories are carried at the lower of cost or market.  Cost of
     inventories of crude oil and refined products is determined under the last-
     in, first-out (LIFO) method.

<TABLE>
<CAPTION>
                                                         (In millions)
                                                    ------------------------
                                                   September 30 December 31
                                                       1996         1995
                                                   ------------ -----------
    <S>                                               <C>          <C>
    Crude oil and natural gas liquids                   $472         $510
    Refined products and merchandise                     800          758
    Supplies and sundry items                             79           93
                                                      ------       ------
      Total (at cost)                                  1,351        1,361
    Less inventory market valuation reserve               30          209
                                                      ------       ------
      Net inventory carrying value                    $1,321       $1,152
                                                      ======       ======
</TABLE>

     The inventory market valuation reserve reflects the extent that the
     recorded cost of crude oil and refined products inventories exceeds net
     realizable value.  The reserve is decreased to reflect increases in market
     prices and inventory turnover and increased to reflect decreases in market
     prices.  Changes in the inventory market valuation reserve result in
     charges or credits to operating income.

 9.  The Marathon Group participates in an agreement (the program) to sell an
     undivided interest in certain accounts receivable subject to limited
     recourse.  Payments are collected from the sold accounts receivable; the
     collections are reinvested in new accounts receivable for the buyers; and a
     yield, based on defined short-term market rates, is transferred to the
     buyers.  At September 30, 1996, the amount sold under the program that had
     not been collected was $340 million, which will be forwarded to the buyers
     at the end of the agreement, or in the event of earlier contract
     termination.  If the Marathon Group does not have a sufficient quantity of
     eligible accounts receivable to reinvest in for the buyers, the size of the
     program will be reduced accordingly.  The buyers have rights to a pool of
     receivables that must be maintained at a level of 110% of the program size.



<PAGE> 28
                        MARATHON GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)

10.  On June 15, 1995, USX eliminated the Marathon Group's Retained Interest in
     the Delhi Group (equivalent to 4,564,814 shares of Delhi Stock).  This was
     accomplished through a reallocation of assets and a corresponding
     adjustment to debt and equity attributed to the Marathon and Delhi Groups.
     The transfer was made at a price of $12.75 per equivalent share of Delhi
     Stock, or an aggregate of $58 million, resulting in a corresponding
     reduction of the Marathon Group debt.  The Retained Interest represented
     the Marathon Group's interest in the earnings and equity of the Delhi
     Group.

11.  USX is the subject of, or a party to, a number of pending or threatened
     legal actions, contingencies and commitments relating to the Marathon Group
     involving a variety of matters, including laws and regulations relating to
     the environment.  Certain of these matters are discussed below.  The
     ultimate resolution of these contingencies could, individually or in the
     aggregate, be material to the Marathon Group financial statements.
     However, management believes that USX will remain a viable and competitive
     enterprise even though it is possible that these contingencies could be
     resolved unfavorably to the Marathon Group.  See discussion of Liquidity in
     USX Consolidated Management's Discussion and Analysis of Financial
     Condition and Results of Operations.

     The Marathon Group is subject to federal, state, local and foreign laws and
     regulations relating to the environment.  These laws generally provide for
     control of pollutants released into the environment and require responsible
     parties to undertake remediation of hazardous waste disposal sites.
     Penalties may be imposed for noncompliance.  At September 30, 1996, and
     December 31, 1995, accrued liabilities for remediation totaled $40 million
     and $37 million, respectively.  It is not presently possible to estimate
     the ultimate amount of all remediation costs that might be incurred or the
     penalties that may be imposed.  Receivables for recoverable costs from
     certain states, under programs to assist companies in cleanup efforts
     related to underground storage tanks at retail marketing outlets, were $23
     million at September 30, 1996, and $22 million at December 31, 1995.

     For a number of years, the Marathon Group has made substantial capital
     expenditures to bring existing facilities into compliance with various laws
     relating to the environment.  In the first nine months of 1996 and for the
     years 1995 and 1994, such capital expenditures totaled $39 million, $50
     million and $70 million, respectively.  The Marathon Group anticipates
     making additional such expenditures in the future; however, the exact
     amounts and timing of such expenditures are uncertain because of the
     continuing evolution of specific regulatory requirements.

     At September 30, 1996, and December 31, 1995, accrued liabilities for
     platform abandonment and dismantlement totaled $136 million and $128
     million, respectively.

     Guarantees by USX of the liabilities of affiliated entities of the Marathon
     Group totaled $14 million at September 30, 1996.

     At September 30, 1996, the Marathon Group's pro rata share of obligations
     of LOOP INC. and various pipeline affiliates secured by throughput and
     deficiency agreements totaled $176 million.  Under the agreements, the
     Marathon Group is required to advance funds if the affiliates are unable to
     service debt.  Any such advances are prepayments of future transportation
     charges.

     At September 30, 1996, contract commitments for the Marathon Group's
     capital expenditures for property, plant and equipment totaled $268 million
     compared with $112 million at December 31, 1995.

<PAGE> 29

                        MARATHON GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     The Marathon Group includes Marathon Oil Company ("Marathon") and certain
other subsidiaries of USX Corporation ("USX") which are engaged in worldwide
exploration, production, transportation and marketing of crude oil and natural
gas; and domestic refining, marketing and transportation of petroleum products.
Management's Discussion and Analysis should be read in conjunction with the
third quarter 1996 USX consolidated financial information and the Marathon Group
financial statements and selected notes.  The discussion of Results of
Operations should be read in conjunction with the Supplemental Statistics
provided on page 36.

     Certain sections of Management's Discussion and Analysis include forward-
looking statements concerning trends or events potentially affecting the
businesses of the Marathon Group.  These statements typically contain words such
as "anticipates", "believes", "estimates", "expects" or similar words indicating
that future outcomes are uncertain.  In accordance with "safe harbor" provisions
of the Private Securities Litigation Reform Act of 1995, these statements are
accompanied by cautionary language identifying important factors, though not
necessarily all such factors, that could cause future outcomes to differ
materially from those set forth in forward-looking statements.  USX included in
Forms 8-K dated September 24, 1996 (for the Marathon Group) and October 23, 1996
(for USX and each of its Groups), cautionary language identifying important
factors with respect to written forward-looking statements in USX external
documents, and oral forward-looking statements made by, or on behalf of USX, its
representatives and its individual Groups.

Results of Operations
- ---------------------
     Revenues (excluding matching buy/sell transactions and excise taxes)
increased by 17% in the third quarter and 14% in the first nine months of 1996
from the comparable prior-year periods, primarily reflecting higher average
refined product, worldwide liquid hydrocarbon and natural gas prices.  Revenues
for the third quarter and first nine months of 1996 and 1995 are summarized in
the following table:

<TABLE>
<CAPTION>
                                                Third Quarter    Nine Months
                                                    Ended           Ended
                                                 September 30    September 30
(Dollars in millions)                            1996    1995    1996     1995
- --------------------------------------------------------------------------------
<S>                                             <C>     <C>     <C>      <C>
Refined Products and Merchandise                $2,063  $1,829  $5,866   $5,308
Crude Oil and Natural Gas Liquids                  346     220     894      638
Natural Gas                                        275     220     867      706
Transportation and Other                            48      60     148      165
                                                ------  ------  ------   ------
Subtotal                                        $2,732  $2,329  $7,775   $6,817

Matching Buy/Sell Transactions (a)                 706     447   2,028    1,499
Excise Taxes (a)                                   757     718   2,090    2,046
                                                ------  ------  ------   ------
  Total Revenues                                $4,195  $3,494 $11,893  $10,362
                                                ======  ======  ======   ======
<FN>
(a)Included in both revenues and operating costs, resulting in no effect on
   income.
</TABLE>


<PAGE> 30

                        MARATHON GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     Operating income for the 1996 third quarter included a $96 million
favorable noncash effect of a decrease in the inventory market valuation
reserve, while the 1995 third quarter included a $51 million unfavorable effect
of an increase in the reserve.  This reserve reflects the extent to which the
recorded costs of crude oil and refined product inventories exceed net
realizable value.  The amounts of increases or decreases in the reserve in
future periods are dependent on changes in future crude oil and refined product
price levels, and inventory turnover.  Third quarter 1995 operating income also
included a $15 million favorable adjustment for expected environmental
remediation recoveries. Excluding the effects of these items, third quarter
operating income increased by $13 million. The improvement primarily resulted
from higher worldwide liquid hydrocarbon and natural gas prices, partially
offset by lower refined product margins and worldwide liquid hydrocarbon
volumes.

     Operating income from worldwide exploration and production ("upstream") was
$222 million in the third quarter of 1996, up $119 million from the third
quarter of last year, reflecting improved domestic and international results.
Operating income from domestic exploration and production was $136 million in
the third quarter of 1996, compared with $72 million in the third quarter of
1995.  The improvement was primarily due to higher average liquid hydrocarbon
and natural gas prices and reduced depreciation, depletion and amortization
("DD&A") expense resulting, in part, from the fourth quarter 1995 adoption of
Statement of Financial Accounting Standards No. 121 - Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of
("SFAS No. 121").  These favorable effects were partially offset by lower liquid
hydrocarbon volumes at Ewing Bank Block 873 in the Gulf of Mexico and from the
1995 sale of Illinois Basin production properties.

     Operating income from international exploration and production was $86
million in the third quarter of 1996, compared with $31 million in the third
quarter of 1995.  The improvement was primarily due to higher average liquid
hydrocarbon and natural gas prices, lower dry well expense and reduced DD&A
expense, resulting mainly from property sales and the adoption of SFAS No. 121.
These favorable changes were partially offset by lower liquid hydrocarbon
liftings which were due primarily to the sales of production properties in
Indonesia and Tunisia and lower liftings in the United Kingdom ("U.K.").

     Operating income from refining, marketing and transportation ("downstream")
operations was $35 million in the third quarter of 1996, compared with $141
million in last year's third quarter.  Third quarter 1995 results included a $15
million favorable adjustment for expected environmental remediation recoveries.
Excluding this item, downstream's third quarter results decreased by $91
million.  The lower results mainly reflected lower refined product margins as
increases in refined product prices lagged increases in crude oil acquisition
costs.  Refining margins were also constrained by a planned maintenance shutdown
in September at Marathon's 175,000-barrel-per-day refinery in Robinson,
Illinois.

     Administrative expenses were $35 million in the third quarter of 1996,
compared with $20 million in the same period of 1995.  Effective with the first
quarter of 1996, Marathon changed its procedures for distributing the costs of
certain administrative services to its operating components in order to optimize
the utilization of these services.  Under the new approach, upstream and
downstream operating components are billed for direct services; unbilled
services are included in "Administrative" (see the Supplemental Statistics).
As a result, third quarter 1996 administrative expenses included an estimated
$12 million of costs that were allocated to other operating components
in 1995.

<PAGE> 31

                        MARATHON GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     Marathon Group operating income in the first nine months of 1996 and 1995
included favorable noncash effects of $179 million and $35 million,
respectively, reflecting decreases in the inventory market valuation reserve.
Operating results for the first nine months of 1996 also included $10 million of
charges associated with the withdrawal from the Marine Preservation Association,
a non-profit oil spill response group, while the first nine months of 1995
included the $15 million favorable adjustment for expected environmental
remediation recoveries.  Excluding the effects of these items,  operating income
in the first nine months of 1996 increased by $174 million from the first nine
months of 1995.  The increase mainly reflected higher average prices for
worldwide liquid hydrocarbons and domestic natural gas, reduced DD&A, resulting
mainly from the adoption of SFAS No. 121 and property sales, and increased
worldwide natural gas volumes, partially offset by lower refined product margins
and decreased worldwide liquid hydrocarbon volumes.

     Other income in the first nine months of 1996 increased by $18 million from
the comparable prior-year period, due mainly to a gain on the sale of an equity
interest in a domestic pipeline company.

     Net interest and other financial costs in the first nine months of 1996
decreased by $12 million from the first nine months of 1995.  Third quarter 1995
interest and other financial costs included a $17 million favorable adjustment
for interest on refunds of federal income taxes claimed for prior years.
Excluding this item, net interest and other financial costs decreased by $29
million from the first nine months of 1995, primarily reflecting lower average
debt levels.

     While the provision for estimated income taxes for the third quarter of
1996 included no significant items, the third quarter of 1995 included a $29
million credit related to the recognition of U.S. income tax benefits for
foreign income tax payments in 1995 and certain prior years.  The provision for
the first nine months of 1996 included an $8 million tax benefit related to the
sale of stock of certain subsidiaries involved in international upstream
activities.

     Net income increased by $71 million in the third quarter of 1996 as
compared with the third quarter of 1995, and by $226 million in the first nine
months of 1996 as compared with the first nine months of 1995.  The increases
mainly reflect the factors discussed above.

Outlook
- -------
     The outlook regarding the Marathon Group's sales levels, margins and income
is largely dependent upon future prices and volumes of crude oil, natural gas
and refined products.  Prices have historically been volatile and have
frequently been driven by unpredictable changes in supply and demand resulting
from fluctuations in economic activity and political developments in the world's
major oil and gas producing areas, including OPEC member countries.  Any
substantial decline in such prices could have a material adverse effect on the
Marathon Group's results of operations.  A prolonged decline in such prices
could also adversely affect the quantity of crude oil and natural gas reserves
that can be economically produced and the amount of capital available for
exploration and development.

     The Marathon Group uses commodity-based derivative instruments to manage
exposure to market risk.  While these instruments are generally used to reduce
risks from unfavorable commodity price movements, they also may limit the
opportunity to benefit from favorable price movements.  During the fourth
quarter of 1996, certain

<PAGE> 32

                        MARATHON GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

hedging strategies will mature which limit the Marathon Group's ability to
benefit from favorable price changes above $20.00 per barrel on approximately
5.5 million barrels, or about 35%, of expected fourth quarter worldwide liquid
hydrocarbon production.

     During the third quarter of 1996, Marathon's exploration success in the
Cotton Valley Reef trend in East Texas continued as three new natural gas
discoveries were announced - the Riley Trust No. 2, Sherrod No. 1 and Noey No. 1
wells.  Marathon is the operator of these discoveries, with a 75% working
interest in the Riley Trust well and a 100% working interest in the Sherrod and
Noey wells.  These wells add approximately 40 net million cubic feet per day to
Marathon's domestic natural gas production capability.  Marathon continues an
active exploration program in this play where it has over 40,000 acres of
leasehold interests.

     Marathon and its co-venturer are moving ahead with design and construction
of "Petronius," a $400 million deepwater Gulf of Mexico drilling and production
project on Viosca Knoll Block 786.  Marathon has a 50% interest in this project.
Production is expected to begin in early 1999 from this discovery, which has
estimated reserves of 80-100 million gross barrels of oil equivalent.

     In September 1996, Marathon and its partner completed a successful
delineation well on the Tchatamba discovery, offshore Gabon.  Oil production is
expected to start in late 1997 and peak at 15,000 gross barrels per day ("bpd")
at this field, where Marathon is the operator with a 75% interest.

     In October, government approval was given to Marathon and its co-venturers
for development of the West Brae field in the U.K. North Sea.  West Brae,
estimated to contain reserves of 30 million gross barrels of oil, will be a
subsea development tied back to the nearby Marathon-operated Brae `A' platform.
Production should begin in late 1997, and the field is expected to produce at
25,000 barrels per day in 1998.  Marathon is the operator and holds a 38%
interest.

     The Marathon Group holds a 30% interest in Sakhalin Energy Investment
Company Ltd. ("Sakhalin Energy"), an incorporated joint venture company
responsible for the overall management of the Sakhalin II Project.  The Sakhalin
II Production Sharing Contract ("PSC") was signed in June 1994 for the
development of the Piltun-Astokhskoye ("PA") oil field and the Lunskoye gas
field located offshore Sakhalin Island in the Russian Far East Region.  In July
1996, Sakhalin Energy obtained the support of Russian authorities to initiate a
plan for the first phase of a development of the PA oil field.  Sakhalin Energy
is now awaiting the Russian Duma's passage of "enabling" legislation that ties
the terms of the PSC to Russian tax law before committing to the project.
Assuming timely approvals and continued progress on stabilization, first
production of oil could occur in mid-1999, with sales from the PA field forecast
to average 45,000 gross bpd annually.  This is based on six months of offshore
loading operations during the ice-free weather window at an estimated production
rate of 90,000 gross bpd during the sales season.

     In September 1996, the Marathon Group announced forecasts of production
levels for full-year 1996 as well as some projections for future years.
Worldwide liquid hydrocarbon production is expected to be about 180,000 bpd for
full-year 1996.  The projection for 1997 is around 175,000 bpd, increasing to
about 221,000 bpd in 1999.  For this same time period, worldwide natural gas
volumes are expected to remain in the range of 1.2 to 1.3 billion cubic feet per
day.  These projections are based on known discoveries and do not include any
additions from acquisitions or future

<PAGE> 33

                        MARATHON GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

exploratory drilling.  Production increases primarily reflect development of
three projects in the Gulf of Mexico (Green Canyon 244, Viosca Knoll 786 and the
recent discovery on Ewing Bank 963), the West Brae field in the U.K. North Sea
and the Tchatamba discovery in Gabon along with initial production from
Marathon's 30% equity interest in Sakhalin Energy.

     The above discussions of projects, expected production levels, reserves and
dates of initial production are based on a number of assumptions, including
(among others) prices, supply and demand, regulatory constraints, reserve
estimates, production decline rates for mature fields, reserve replacement
rates, and geological and operating considerations.  In addition, development of
new production properties in countries outside the United States may require
protracted negotiations with host governments and are frequently subject to
political considerations, such as tax regulations, which could adversely affect
the economics of projects.  With respect to the Sakhalin II project in Russia,
certain Russian laws and normative acts at the Russian Federation and local
levels need to be brought into compliance with the existing Production Sharing
Agreement Law, and development plans need to be finalized prior to final
commitment by the shareholders of Sakhalin Energy.  To the extent these
assumptions prove inaccurate, actual results could be materially different than
present expectations.

Cash Flows
- ----------
     Net cash provided from operating activities was $890 million in the first
nine months of 1996, compared with $577 million in the first nine months of
1995.  The 1996 period included payments of $39 million related to certain state
tax issues, while the 1995 period included payments of $96 million representing
the Marathon Group's share of the amortized discount on USX's zero coupon
debentures.  Excluding the effects of these items, net cash provided from
operating activities increased by $256 million, mainly reflecting favorable
working capital changes and increased profitability.

     Capital expenditures for property, plant and equipment in the third quarter
and first nine months of 1996 were $176 million and $426 million, respectively,
compared with $151 million and $409 million in the comparable 1995 periods.
Expenditures during 1996 have mainly been for domestic upstream projects,
relating to development of properties in the Gulf of Mexico.  Capital
expenditures for the year 1996 are expected to total approximately $755 million.
Contract commitments for capital expenditures were $268 million at September 30,
1996, compared with $112 million at year-end 1995.

     In September 1996, the Marathon Group announced that capital, investment
and exploration expenditures are expected to average between $1 billion and $1.1
billion annually over the 1997-1999 period.  Capital and investment spending
will include upstream projects previously mentioned in the "Outlook" section and
certain downstream projects, including retail marketing expansion and investment
in the Nautilus natural gas pipeline system.  During this period, exploration
activities will be concentrated in existing core areas, primarily in the Gulf of
Mexico where a dozen or more wildcat wells are expected to be drilled annually.
International areas such as the U.K. and Irish Continental Shelf, West Africa
and Egypt will also continue to be explored.  Since the Marathon Group follows
the successful efforts method of accounting for oil and gas exploration and
development, any successful exploration activities will be capitalized.

<PAGE> 34

                        MARATHON GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     Cash from the disposal of assets was $126 million in the first nine months
of 1996, compared with $18 million in the first nine months of 1995.  Proceeds
in 1996 primarily reflect the sales of interests in oil and gas production
properties in Indonesia and Tunisia and the sale of an equity interest in a
domestic pipeline company.

     Financial obligations decreased by $459 million in the first nine months of
1996 as net cash provided from operating activities and asset sales exceeded
cash used for capital expenditures and dividend payments.  Financial obligations
consist of the Marathon Group's portion of USX debt and preferred stock of a
subsidiary attributed to all three groups, as well as debt specifically
attributed to the Marathon Group.

     In October 1996, the USX Board of Directors declared a third quarter
dividend on the USX-Marathon Group Common Stock of 19 cents per share, an
increase of two cents per share over the previous quarterly dividend.  The
dividend is payable on December 10, 1996 to stockholders of record at the close
of business November 20, 1996.  Total dividends paid on the USX-Marathon Group
Common Stock in the fourth quarter of 1996 will increase by approximately $6
million as a result of this dividend increase.

Liquidity
- ---------
     For discussion of USX's liquidity and capital resources, see USX
Consolidated Management's Discussion and Analysis of Financial Condition and
Results of Operations.

Environmental Matters, Contingencies and Commitments
- ----------------------------------------------------
     The Marathon Group has incurred and will continue to incur substantial
capital, operating and maintenance, and remediation expenditures as a result of
environmental laws and regulations.  To the extent these expenditures, as with
all costs, are not ultimately reflected in the prices of the Marathon Group's
products and services, operating results will be adversely affected.  The
Marathon Group believes that substantially all of its competitors are subject to
similar environmental laws and regulations.  However, the specific impact on
each competitor may vary depending on a number of factors, including the age and
location of its operating facilities, marketing areas, production processes and
whether or not it is engaged in the petrochemical business or the marine
transportation of crude oil and refined products.

     USX has been notified that it is a potentially responsible party ("PRP") at
17 waste sites related to the Marathon Group under the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA") as of
September 30, 1996.  In addition, there are 12 sites related to the Marathon
Group where USX has received information requests or other indications that USX
may be a PRP under CERCLA but where sufficient information is not presently
available to confirm the existence of liability.  There are also 70 additional
sites, excluding retail marketing outlets, related to the Marathon Group where
remediation is being sought under other environmental statutes, both federal and
state.  At many of these sites, USX is one of a number of parties involved and
the total cost of remediation, as well as USX's share thereof, is frequently
dependent upon the outcome of investigations and remedial studies.  The Marathon
Group accrues for environmental remediation activities when the responsibility
to remediate is probable and the amount of

<PAGE> 35

                        MARATHON GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

associated costs is reasonably determinable.  As environmental remediation
matters proceed toward ultimate resolution or as additional remediation
obligations arise, charges in excess of those previously accrued may be
required.

     USX is the subject of, or a party to, a number of pending or threatened
legal actions, contingencies and commitments relating to the Marathon Group
involving a variety of matters, including laws and regulations relating to the
environment (see Note 11 to the Marathon Group financial statements for a
discussion of certain of these matters).  The ultimate resolution of these
contingencies could, individually or in the aggregate, be material to the
Marathon Group financial statements.  However, management believes that USX will
remain a viable and competitive enterprise even though it is possible that these
contingencies could be resolved unfavorably to the Marathon Group.  See
discussion of Cash Flows and Liquidity in USX Consolidated Management's
Discussion and Analysis of Financial Condition and Results of Operations.

<PAGE> 36

<TABLE>
<CAPTION>
                        MARATHON GROUP OF USX CORPORATION
                             SUPPLEMENTAL STATISTICS
                        ---------------------------------

                                                Third Quarter    Nine Months
                                                    Ended           Ended
                                                 September 30    September 30
(Dollars in millions)                            1996    1995    1996     1995
- --------------------------------------------------------------------------------
<S>                                            <C>     <C>     <C>     <C>
OPERATING INCOME (LOSS)
 Exploration & Production
   Domestic                                       $136     $72    $397    $242
   International                                    86      31     254     136
 Refining, Marketing & Transportation.              35     141     195     285
 Gas Gathering & Processing                          -       -       5       -
 Administrative (a)                                (35)    (20)   (101)    (62)
                                                ------  ------  ------   ------
                                                  $222    $224    $750    $601
 Inventory Market Val. Res. Adjustment              96     (51)    179      35
                                                ------ -------  ------  -------
   Total Marathon Group                           $318    $173    $929    $636

CAPITAL EXPENDITURES                              $176    $151    $426    $409


OPERATING STATISTICS

Net Liquid Hydrocarbon Production (b):
 Domestic                                        119.2   134.8   122.6   132.2
 International                                    55.0    77.9    60.3    73.3
                                                ------ -------  ------   ------
   Worldwide                                     174.2   212.7   182.9   205.5

Net Natural Gas Production (c):
 Domestic                                        648.4   601.1   663.1   634.2
 International - Equity                          437.2   411.7   496.1   449.3
 International - Other (d)                        31.6    23.9    32.9    30.9
                                               ------- ------- ------- -------
   Worldwide                                   1,117.2 1,036.7 1,192.1 1,114.4

Average Equity Sales Prices:
 Liquid Hydrocarbons (per Bbl)
   Domestic                                     $18.90  $14.13  $17.71  $14.66
   International                                 20.37   15.82   19.36   16.70
 Natural Gas (per Mcf)
   Domestic                                      $2.05   $1.59   $2.03   $1.63
   International                                  1.93    1.74    1.90    1.83

Natural Gas Sales (c) (e):
 Domestic                                        952.6   961.2 1,005.2   982.2
 International                                   468.8   435.6   529.0   480.2
                                               ------- ------- ------- -------
Worldwide                                      1,421.4 1,396.8 1,534.2 1,462.4

Crude Oil Refined (b)                            520.5   524.5   511.2   512.1
Refined Products Sold (b)                        789.1   747.9   766.3   732.7

- ---------------
<FN>
  (a) Third quarter and first nine months of 1996 include an estimated $12
      million and $38 million, respectively, in expenses which were allocated
      to operating components in 1995.
  (b) Thousands of barrels per day
  (c) Millions of cubic feet per day
  (d) Represents gas acquired for injection and subsequent resale
  (e) Represents equity, royalty and trading volumes
</TABLE>


<PAGE> 37

Part I - Financial Information (Continued):

<TABLE>
   C.  U. S. Steel Group
<CAPTION>
                      U. S. STEEL GROUP OF USX CORPORATION
                       STATEMENT OF OPERATIONS (Unaudited)
                      ------------------------------------
                                                Third Quarter    Nine Months
                                                    Ended           Ended
                                                 September 30    September 30
(Dollars in millions, except per share data)     1996   1995*    1996    1995*
- --------------------------------------------------------------------------------
<S>                                             <C>     <C>     <C>      <C>
REVENUES                                        $1,611  $1,620  $4,782   $4,827

OPERATING COSTS:
 Cost of sales (excludes items shown below)      1,423   1,372   4,322    4,113
 Selling, general and administrative
  expenses (credits)                               (41)    (34)   (121)    (103)
 Depreciation, depletion and amortization           69      80     222      241
 Taxes other than income taxes                      57      57     174      161
                                                ------  ------  ------   ------
   Total operating costs                         1,508   1,475   4,597    4,412
                                                ------  ------  ------   ------
OPERATING INCOME                                   103     145     185      415

Gain on affiliate stock offering                     -       -      53        -
Other income                                        20      22      41       60
Interest and other financial income                  -       -       3        5
Interest and other financial costs                 (30)    (32)    (88)    (107)
                                                ------  ------  ------   ------

INCOME BEFORE INCOME TAXES                          93     135     194      373

Less provision for estimated income taxes           23      49      46      132
                                                ------  ------  ------   ------

INCOME BEFORE EXTRAORDINARY LOSS                    70      86     148      241
Extraordinary loss, net of income tax                -      (1)      -       (1)
                                                ------  ------  ------   ------

NET INCOME                                          70      85     148      240
Dividends on preferred stock                        (6)     (6)    (17)     (19)
                                                ------  ------  ------   ------
NET INCOME APPLICABLE TO STEEL STOCK               $64     $79    $131     $221
                                                ======  ======  ======   ======

STEEL STOCK DATA:
 Income per share:
   Income before extraordinary loss
    - Primary                                     $.76    $.99   $1.56    $2.86
    - Fully diluted                                .75     .95    1.55     2.77
 Extraordinary loss - primary and fully diluted      -    (.01)      -    (.01)
 Net income
    - Primary                                     $.76    $.98   $1.56    $2.85
    - Fully diluted                                .75     .94    1.55     2.76

 Dividends paid per share                          .25     .25     .75      .75

 Weighted average shares, in thousands
    - Primary                                   84,487  80,700  83,781   77,831
    - Fully diluted                             86,422  90,008  85,588   87,139
<FN>
*Certain amounts have been reclassified to conform to 1996 classifications.

Selected notes to financial statements appear on pages 40-43.
</TABLE>


<PAGE> 38

<TABLE>
                      U. S. STEEL GROUP OF USX CORPORATION
                            BALANCE SHEET (Unaudited)
                      ------------------------------------
<CAPTION>
                                        
                                                   September 30 December 31
(Dollars in millions)                                  1996         1995
- --------------------------------------------------------------------------------
<S>                                                   <C>           <C>
ASSETS
Current assets:
  Cash and cash equivalents                              $20           $52
  Receivables, less allowance for doubtful
   accounts of $18 and $18                               513           579
  Receivable from other groups                            40            35
  Inventories                                            724           601
  Deferred income tax benefits                           168           177
                                                      ------        ------
     Total current assets                              1,465         1,444
Long-term receivables and other investments,
 less reserves of $25 and $23                            541           613
Property, plant and equipment, less accumulated
 depreciation, depletion and amortization of
 $6,044 and $5,909                                     2,537         2,512
Long-term deferred income tax benefits                   321           362
Prepaid pensions                                       1,691         1,546
Other noncurrent assets                                   40            44
                                                      ------        ------
     Total assets                                     $6,595        $6,521
                                                      ======        ======
LIABILITIES
Current liabilities:
  Notes payable                                          $70            $8
  Accounts payable                                       695           815
  Payable to other groups                                  -            11
  Payroll and benefits payable                           339           389
  Accrued taxes                                          138           180
  Accrued interest                                        17            23
  Long-term debt due within one year                      50            93
                                                      ------        ------
     Total current liabilities                         1,309         1,519
Long-term debt, less unamortized discount              1,070           923
Employee benefits                                      2,452         2,424
Deferred credits and other liabilities                   237           247
Preferred stock of subsidiary                             64            64
                                                      ------        ------
     Total liabilities                                 5,132         5,177
                                                      ------        ------

STOCKHOLDERS' EQUITY
Preferred stock                                            7             7
Common stockholders' equity                            1,456         1,337
                                                      ------        ------
     Total stockholders' equity                        1,463         1,344
                                                      ------        ------
     Total liabilities and stockholders' equity       $6,595        $6,521
                                                      ======        ======

<FN>
Selected notes to financial statements appear on pages 40-43.
</TABLE>


<PAGE> 39

<TABLE>
                      U. S. STEEL GROUP OF USX CORPORATION
                       STATEMENT OF CASH FLOWS (Unaudited)
                      ------------------------------------
<CAPTION>
                                        
                                                       Nine Months Ended
                                                          September 30
(Dollars in millions)                                  1996         1995
- --------------------------------------------------------------------------------
<S>                                                    <C>           <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
OPERATING ACTIVITIES:
Net income                                              $148          $240
Adjustments to reconcile to net cash provided
 from (used in) operating activities:
  Extraordinary loss                                       -             1
  Depreciation, depletion and amortization               222           241
  Pensions                                              (146)         (288)
  Postretirement benefits other than pensions             14            (6)
  Deferred income taxes                                   58           151
  Gain on disposal of assets                              (8)          (20)
  Gain on affiliate stock offering                       (53)            -
  Payment of amortized discount on zero coupon debentures  -           (28)
  Changes in:
     Current receivables                                  30            38
     Inventories                                        (123)          (57)
     Current accounts payable and accrued expenses      (215)          115
  All other items - net                                   (5)         (103)
                                                      ------        ------
     Net cash provided from (used in)
      operating activities                               (78)          284
                                                      ------        ------
INVESTING ACTIVITIES:
Capital expenditures                                    (249)         (224)
Disposal of assets                                       144            57
All other items - net                                     10            11
                                                      ------        ------
     Net cash used in investing activities               (95)         (156)
                                                      ------        ------
FINANCING ACTIVITIES:
Increase (decrease) in U. S. Steel Group's share of USX
 consolidated debt                                       175          (192)
Specifically attributed debt - repayments                 (4)           (4)
Preferred stock redeemed                                   -           (25)
Steel Stock issued                                        47           205
Dividends paid                                           (77)          (70)
                                                      ------        ------
     Net cash provided from (used in)
      financing activities                               141           (86)
                                                      ------        ------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS     (32)           42
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR            52            20
                                                      ------        ------
CASH AND CASH EQUIVALENTS AT END OF PERIOD               $20           $62
                                                      ======        ======
Cash used in operating activities included:
  Interest and other financial costs paid (net of
   amount capitalized)                                 $(107)        $(136)
  Income taxes paid, including settlements with
   other groups                                          (55)           (3)


<FN>
Selected notes to financial statements appear on pages 40-43.
</TABLE>


<PAGE> 40

                      U. S. STEEL GROUP OF USX CORPORATION
                     SELECTED NOTES TO FINANCIAL STATEMENTS
                     --------------------------------------
                                   (Unaudited)
                                        
                                        
 1.  The information furnished in these financial statements is unaudited but,
     in the opinion of management, reflects all adjustments necessary for a fair
     presentation of the results for the periods covered.  All such adjustments
     are of a normal recurring nature unless disclosed otherwise.  These
     financial statements, including selected notes, have been prepared in
     accordance with the applicable rules of the Securities and Exchange
     Commission and do not include all of the information and disclosures
     required by generally accepted accounting principles for complete financial
     statements.  Additional information is contained in the USX Annual Report
     on Form 10-K for the year ended December 31, 1995.

 2.  The financial statements of the U. S. Steel Group include the financial
     position, results of operations and cash flows for all businesses of USX
     other than the businesses, assets and liabilities included in the Marathon
     Group or the Delhi Group, and a portion of the corporate assets and
     liabilities and related transactions which are not separately identified
     with ongoing operating units of USX.  These financial statements are
     prepared using the amounts included in the USX consolidated financial
     statements.  Corporate amounts reflected in these financial statements are
     determined based upon methods which management believes to be reasonable.
     The accounting policies applicable to the preparation of the financial
     statements of the U. S. Steel Group may be modified or rescinded in the
     sole discretion of the Board of Directors of USX (Board), although the
     Board has no present intention to do so.  The Board may also adopt
     additional policies depending on the circumstances.

     Although the financial statements of the U. S. Steel Group, the Marathon
     Group and the Delhi Group separately report the assets, liabilities
     (including contingent liabilities) and stockholders' equity of USX
     attributed to each such group, such attribution of assets, liabilities
     (including contingent liabilities) and stockholders' equity among the U. S.
     Steel Group, the Marathon Group and the Delhi Group for purposes of
     preparing their respective financial statements does not affect legal title
     to such assets and responsibility for such liabilities.  Holders of USX-
     U. S. Steel Group Common Stock (Steel Stock), USX-Marathon Group Common
     Stock (Marathon Stock) and USX-Delhi Group Common Stock (Delhi Stock) are
     holders of common stock of USX and continue to be subject to all the risks
     associated with an investment in USX and all of its businesses and
     liabilities.  Financial impacts arising from one Group that affect the
     overall cost of USX's capital could affect the results of operations and
     financial condition of other groups.  In addition, net losses of any Group,
     as well as dividends or distributions on any class of USX Common Stock or
     series of Preferred Stock and repurchases of any class of USX Common Stock
     or series of Preferred Stock at prices in excess of par or stated value,
     will reduce the funds of USX legally available for payment of dividends on
     all classes of Common Stock.  Accordingly, the USX consolidated financial
     information should be read in connection with the U. S. Steel Group
     financial information.


<PAGE> 41

                      U. S. STEEL GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)


 3.  The method of calculating net income (loss) per share for the Steel Stock,
     Marathon Stock and Delhi Stock reflects the Board's intent that the
     separately reported earnings and surplus of the U. S. Steel Group, the
     Marathon Group and the Delhi Group, as determined consistent with the USX
     Certificate of Incorporation, are available for payment of dividends on the
     respective classes of stock, although legally available funds and
     liquidation preferences of these classes of stock do not necessarily
     correspond with these amounts.

     Primary net income per share is calculated by adjusting net income for
     dividend requirements of preferred stock and is based on the weighted
     average number of common shares outstanding plus common stock equivalents,
     provided they are not antidilutive.  Common stock equivalents result from
     assumed exercise of stock options, where applicable.

     Fully diluted net income per share assumes conversion of convertible
     securities for the applicable periods outstanding and assumes exercise of
     stock options, provided in each case, the effect is not antidilutive.

 4.  Operating income includes net periodic pension credits of $123 million and
     $99 million in the first nine months of 1996 and 1995, respectively,
     ($42 million and $32 million in the third quarter of 1996 and 1995,
     respectively).  These pension credits are primarily noncash and for the
     most part are included in selling, general and administrative expenses. The
     expected long-term rate of return on plan assets, which is reflected in the
     calculation of net periodic pension credits, is 10% for both 1996 and 1995.

 5.  On May 2, 1996, an aggregate of 6.9 million shares of RMI Titanium Company
     (RMI) common stock was sold in a public offering at a price of $18.50 per
     share and total net proceeds of $121 million.  Included in the offering
     were 2.3 million shares sold by USX for net proceeds of $40 million.  The
     U. S. Steel Group recognized a total pretax gain in the second quarter of
     1996 of $53 million, of which $34 million was attributable to the shares
     sold by USX and $19 million was attributable to the increase in value of
     its investment as a result of the shares sold by RMI.  The income tax
     effect related to the total gain was $19 million.  As a result of this
     transaction, USX's ownership in RMI decreased from approximately 50% to
     27%.  The U. S. Steel Group continues to account for its investment in RMI
     under the equity method of accounting.

 6.  The financial statement provision for estimated income taxes and related
     tax payments or refunds have been reflected in the U. S. Steel Group, the
     Marathon Group and the Delhi Group financial statements in accordance with
     USX's tax allocation policy for such groups.  In general, such policy
     provides that the consolidated tax provision and related tax payments or
     refunds are allocated among the U. S. Steel Group, the Marathon Group and
     the Delhi Group for group financial statement purposes, based principally
     upon the financial income, taxable income, credits, preferences and other
     amounts directly related to the respective groups.

<PAGE> 42

                      U. S. STEEL GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)


 6.  (Continued)

     The provision for estimated income taxes for the U. S. Steel Group is based
     on tax rates and amounts which recognize management's best estimate of
     current and deferred tax assets and liabilities.  Differences between the
     combined interim tax provisions of the U. S. Steel, Marathon and Delhi
     Groups and USX consolidated are allocated to each group based on the
     relationship of the individual group provisions to the combined interim
     provisions.

 7.  In the third quarter of 1995, USX extinguished $467 million of debt prior
     to maturity, resulting in an extraordinary loss to the U. S. Steel Group of
     $1 million, net of a $1 million income tax benefit.

 8.  Inventories are carried at the lower of cost or market.  Cost of
     inventories is determined primarily under the last-in, first-out (LIFO)
     method.

<TABLE>
<CAPTION>
                                                         (In millions)
                                                   -------------------------
                                                   September 30 December 31
                                                       1996         1995
                                                   ------------ -----------
    <S>                                                 <C>           <C>
    Raw materials                                       $153          $89
    Semi-finished products                               329          300
    Finished products                                    181          143
    Supplies and sundry items                             61           69
                                                        ----         ----
      Total                                             $724         $601
                                                        ====         ====
</TABLE>

 9.  The U. S. Steel Group participates in an agreement (the program) to sell an
     undivided interest in certain accounts receivable subject to limited
     recourse.  Payments are collected from the sold accounts receivable; the
     collections are reinvested in new accounts receivable for the buyers; and a
     yield, based on defined short-term market rates, is transferred to the
     buyers.  At September 30, 1996, the amount sold under the program that had
     not been collected was $350 million, which will be forwarded to the buyers
     at the end of the agreement, or in the event of earlier contract
     termination.  If the U. S. Steel Group does not have a sufficient quantity
     of eligible accounts receivable to reinvest in for the buyers, the size of
     the program will be reduced accordingly.  The buyers have rights to a pool
     of receivables that must be maintained at a level of 115% of the program
     size.  In the event of a change in control of USX, as defined in the
     agreement, the U. S. Steel Group may be required to forward payments
     collected on sold accounts receivable to the buyers.

     Prior to 1993, USX Credit, a division of USX, sold certain of its loans
     receivable subject to limited recourse.  USX Credit continues to collect
     payments from the loans and transfer to the buyers principal collected plus
     yield based on defined short-term market rates.  At September 30, 1996, the
     balance of sold loans receivable subject to recourse was $58 million.
     USX Credit is not actively seeking new loans at this time.  In the event of
     a change in control of USX, as defined in the agreement, the U. S. Steel
     Group may be required to provide cash collateral in the amount of the
     uncollected loans receivable to assure compliance with the limited recourse
     provisions.

<PAGE> 43

                      U. S. STEEL GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)


10.  USX is the subject of, or a party to, a number of pending or threatened
     legal actions, contingencies and commitments relating to the U. S. Steel
     Group involving a variety of matters including laws and regulations
     relating to the environment.  Certain of these matters are discussed below.
     The ultimate resolution of these contingencies could, individually or in
     the aggregate, be material to the U. S. Steel Group financial statements.
     However, management believes that USX will remain a viable and competitive
     enterprise even though it is possible that these contingencies could be
     resolved unfavorably to the U. S. Steel Group.  See discussion of Liquidity
     in USX Consolidated Management's Discussion and Analysis of Financial
     Condition and Results of Operations.

     The U. S. Steel Group is subject to federal, state and local laws and
     regulations relating to the environment.  These laws generally provide for
     control of pollutants released into the environment and require responsible
     parties to undertake remediation of hazardous waste disposal sites.
     Penalties may be imposed for noncompliance.  At September 30, 1996, and
     December 31, 1995, accrued liabilities for remediation totaled $110 million
     and $116 million, respectively.  It is not presently possible to estimate
     the ultimate amount of all remediation costs that might be incurred or the
     penalties that may be imposed.

     For a number of years, the U. S. Steel Group has made substantial capital
     expenditures to bring existing facilities into compliance with various laws
     relating to the environment.  In the first nine months of 1996 and for the
     years 1995 and 1994, such capital expenditures totaled $59 million, $55
     million and $57 million, respectively.  The U. S. Steel Group anticipates
     making additional such expenditures in the future; however, the exact
     amounts and timing of such expenditures are uncertain because of the
     continuing evolution of specific regulatory requirements.

     Guarantees by USX of the liabilities of affiliated entities of the U. S.
     Steel Group totaled $37 million at September 30, 1996.  In the event that
     any defaults of guaranteed liabilities occur, USX has access to its
     interest in the assets of the affiliates to reduce U. S. Steel Group losses
     resulting from these guarantees.  As of September 30, 1996, the largest
     guarantee for a single affiliate was $18 million.

     At September 30, 1996, contract commitments for the U. S. Steel Group's
     capital expenditures for property, plant and equipment totaled $168 million
     compared with $178 million at December 31, 1995.


<PAGE> 44

                      U. S. STEEL GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     The U. S. Steel Group includes U. S. Steel, which is primarily engaged in
the production and sale of steel mill products, coke and taconite pellets.  The
U. S. Steel Group also includes the management of mineral resources, domestic
coal mining, engineering and consulting services and technology licensing
(together with U. S. Steel, the "Steel and Related Businesses").  Other
businesses that are part of the U. S. Steel Group include real estate
development and management, and leasing and financing activities.  Management's
Discussion and Analysis should be read in conjunction with the third quarter
1996 USX consolidated financial information and the U. S. Steel Group financial
statements and selected notes.  The discussion of Results of Operations should
be read in conjunction with the Supplemental Statistics provided on page 50.

     Certain sections of Management's Discussion and Analysis include forward-
looking statements concerning trends or events potentially affecting the
businesses of the U. S. Steel Group.  These statements typically contain words
such as "anticipates", "believes", "estimates", "expects" or similar words
indicating that future outcomes are uncertain.  In accordance with "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995, these
statements are accompanied by cautionary language identifying important factors,
though not necessarily all such factors, that could cause future outcomes to
differ materially from those set forth in forward-looking statements.  USX
included in a Form 8-K dated October 23, 1996, cautionary language identifying
important factors with respect to written forward-looking statements in USX
external documents, and oral forward-looking statements made by, or on behalf of
USX, its representatives and its individual Groups.

Results of Operations
- ---------------------
     Revenues for the U. S. Steel Group decreased $9 million and $45 million in
the third quarter and first nine months of 1996, respectively, compared with the
same periods in 1995.  The decreases primarily resulted from reduced steel
shipment volumes and lower steel prices, partially offset by an improved product
mix.

     Operating income for Steel and Related Businesses decreased $66 million in
the third quarter of 1996, compared with the same quarter of 1995.  The third
quarter 1995 operating income included a $13 million favorable accrual
adjustment for certain employee-related costs and a $6 million charge related to
repairs of the Gary Works No. 8 blast furnace.  Excluding these items, third
quarter 1996 operating income decreased $59 million from the third quarter 1995.
The decline was mainly due to cost effects and inefficiencies related to planned
and unplanned blast furnace outages, reduced steel shipment volumes and lower
steel prices, partially offset by an improved product mix.  Costs and shipments
were affected by a 70-day scheduled outage for a full reline of the blast
furnace at Fairfield Works, a 45-day scheduled outage for a partial reline of
the No. 4 blast furnace at Gary Works and the lingering effects of an unplanned
outage at the Gary Works No. 13 blast furnace, which occurred in the second
quarter.

     The Gary Works No. 13 blast furnace, which represents about half of Gary
Works iron producing capacity and roughly one-fourth of U.S. Steel's iron
capacity, was damaged April 2 in a hearth break-out.  In addition to direct
repair costs,

<PAGE> 45

                      U. S. STEEL GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

operating results were adversely affected by production inefficiencies at Gary,
as well as other U. S. Steel plants, reduced shipments and higher costs for
purchased iron and semifinished steel.  The total effect of the No. 13 blast
furnace outage on the first nine months operating income is estimated to be more
than $100 million.  USX maintains physical damage and business interruption
insurance coverage for events such as the No. 13 blast furnace breakout and the
1995 Gary Works No. 8 blast furnace explosion, subject to a $50 million
deductible for recoverable items.  However, an estimate of the amount or timing
of recoveries for the No. 13 blast furnace outage cannot be made at this time.
On October 4, 1996, USX filed a suit in Lake County, Indiana, Superior Court
against its insurers related to the No. 8 blast furnace explosion.  The timing
of the resolution of this litigation and the outcome cannot be predicted at this
time.

     Administrative and Other Businesses includes the portion of pension
credits, postretirement benefit costs and certain other expenses principally
attributable to the former businesses of the U. S. Steel Group as well as USX
corporate general and administrative costs allocated to the U. S. Steel Group.
Operating income for Administrative and Other Businesses in the third quarter of
1996 increased $24 million over the same quarter of 1995 primarily due to higher
pension credits, lower environmental accruals and higher income from USX Credit.

     Operating income for Steel and Related Businesses decreased $284 million in
the first nine months of 1996, compared with the same period of 1995.  Results
included $39 million of charges related to repair costs on the Gary (Ind.) Works
No. 13 blast furnace, and $16 million of charges for unrelated legal accruals.
Results for the first nine months of 1995 included $33 million of charges for
the repair of the Gary Works No. 8 blast furnace, $29 million of charges related
to the Pickering v. USX litigation, and a $13 million favorable accrual
adjustment for certain employee-related costs.  Excluding these charges,
operating income for the first nine months of 1996 decreased $278 million from
the same period in 1995.  The decrease was mainly due to cost inefficiencies
related to the planned and unplanned blast furnace outages, lower steel prices
and steel shipment volumes, partially offset by an improved product mix.

     Operating income for Administrative and Other Businesses increased $54
million in the first nine months of 1996 compared with the same period in 1995
primarily due to higher pension credits, higher income from USX Credit and lower
environmental accruals.

     The pension credits referred to above, combined with pension costs for
ongoing operating units of the U. S. Steel Group, resulted in net periodic
pension credits (which are primarily noncash) of $42 million and $123 million
for the third quarter and first nine months of 1996, respectively, compared with
$32 million and $99 million for the third quarter and first nine months of 1995,
respectively.  The amounts of these credits fluctuate over time primarily
reflecting changes in the expected long-term rate of return on plan assets and
the assumed discount rate on the outstanding pension obligation.  To the extent
that these credits decline in the future, operating income would be adversely
affected.


<PAGE> 46

                      U. S. STEEL GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     Gain on affiliate stock offering totaled $53 million for the first nine
months of 1996.  For further details, see Note 5 to the U. S. Steel Group
Financial Statements.

     Other income for the first nine months of 1996 decreased $19 million over
the same period in 1995 due to lower income from affiliates.

     Net income decreased by $15 million, or 18%, in the third quarter of 1996
as compared with the third quarter of 1995, and by $92 million, or 38%, in the
first nine months of 1996 as compared with the  first nine months of 1995.  The
decreases mainly reflect the factors discussed above.

     Third quarter 1996 steel shipments of 2.7 million tons and raw steel
production of 2.5 million tons decreased 5% and 16%, respectively, from the same
quarter of 1995.  Steel shipments and raw steel production in the first nine
months of 1996 totaled 8.3 million tons and 8.2 million tons, respectively.
These represented decreases of 1% and 8%, respectively.  Steel shipments for the
third quarter and first nine months of 1996 included export shipments of 0.1
million tons and 0.4 million tons, respectively, compared with 0.6 million tons
and 1.0 million tons, respectively, in the same periods in 1995.  Raw steel
capability utilization in the third quarter of 1996 averaged approximately 79%
versus 96% of capability in the third quarter of 1995.  Raw steel capability
utilization in the first nine months of 1996 averaged approximately 86% versus
96% of capability in the first nine months of 1995.  The decreases in raw steel
capability utilization were due to planned and unplanned blast furnace outages.
As a result of improvements in operating efficiencies, U. S. Steel increased its
stated annual raw steel production capability by 0.3 million tons to 12.8
million tons for 1996.

Outlook
- -------
     The U. S. Steel Group expects a continued strong order book for the fourth
quarter of 1996.  Shipments and operating rates in the fourth quarter are
expected to be higher than the third quarter as a result of the completion of
the two scheduled blast furnace outages.  Fourth quarter transaction prices are
expected to increase for some products based on announced price increases
effective September 29; however, product mix is expected to be less favorable
than the third quarter of 1996.  Additionally, U. S. Steel has informed its
customers of price increases for most products effective in January 1997.

     The steel industry is characterized by excess world supply which has
restricted the ability of U. S. Steel and the industry to raise prices during
periods of economic growth and resist price decreases during economic
contraction.  Within the next year, the anticipated availability of flat-rolled
steel from several new domestic plants scheduled to begin production may
ultimately have an adverse effect on product prices and shipment levels as
companies attempt to gain or retain market share.

     Steel imports to the United States accounted for an estimated 22% of the
domestic steel market in the first eight months of 1996, and 21%, 25% and 19% of
the domestic steel market in the years 1995, 1994 and 1993, respectively.
During July and August of 1996, steel imports increased sharply and accounted
for an estimated 25% and 27%, respectively, of the domestic steel market.  The
domestic

<PAGE> 47

                      U. S. STEEL GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

steel industry has, in the past, been adversely affected by unfairly traded
imports, and higher levels of imported steel may ultimately have an adverse
effect on product prices, shipment levels and results of operations.

     USX's labor agreement with the United Steelworkers of America ("USWA")
provides for reopener negotiations of specific payroll items with the
contingency for binding interest arbitration if agreement concerning such items
is not reached.  Settlement on such items has not yet been achieved.  Any
changes resulting from a negotiated settlement or interest arbitration will
become effective during the first quarter of 1997.

     The U. S. Steel Group's expectations as to levels of sales are based on
assumptions as to levels of economic activity, future product prices, product
mix and shipments.  In addition, the operations of the U. S. Steel Group are
subject to planned and unplanned outages due to maintenance, equipment
malfunctions or work stoppages; and various hazards, including explosions, fires
and severe weather conditions, which could disrupt operations or the
availability of raw materials, resulting in reduced production volumes,
increased production costs and lower income.  In the event these assumptions
prove inaccurate, actual results could be materially different than present
expectations.

Cash Flows
- ----------
     Net cash used in operating activities was $78 million in the first nine
months of 1996, compared with net cash provided from operating activities of
$284 million in the same period of 1995.  The first nine months of 1996 included
a payment of $59 million to the Internal Revenue Service ("IRS") for certain
agreed and unagreed adjustments relating to the tax year 1990.  In addition, net
cash used in operating activities included a payment of $28 million related to
the Pickering litigation.  The first nine months of 1995 included payments of
$169 million to fund the U. S. Steel Group's principal pension plan, $28 million
representing U. S. Steel's share of the amortized discount of USX's zero coupon
debentures and $20 million as partial settlement in the Pickering litigation.
Excluding these items, net cash from operating activities decreased by $492
million due to unfavorable working capital changes and decreased profitability.

     In accordance with USX's long-term funding practice, which is designed to
maintain an appropriate funded status, USX expects to contribute approximately
$45 million in 1997 to fund the U. S. Steel Group's principal pension plan for
the 1996 plan year.  This amount, which is based on a recently completed long
term funding study, is less than the previously disclosed funding projections of
approximately $100 million annually.

     Cash from the disposal of assets increased $87 million in the first nine
months of 1996 compared with the same period of 1995.  The 1996 proceeds
reflected the sale of the U. S. Steel Group's investment in National-Oilwell and
RMI Titanium Company Common Stock.  The 1995 proceeds mainly reflected property
sales.

     Capital expenditures for property, plant and equipment in the third quarter
and first nine months of 1996 were $91 million and $249 million, respectively,

<PAGE> 48

                      U. S. STEEL GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

compared with $82 million and $224 million, respectively, in the same periods in
1995.

     For the year 1996, capital expenditures are expected to total approximately
$320 million, compared with $324 million in 1995. Capital expenditures
for 1996 include the blast furnace reline and new galvanizing line at Fairfield
Works, additional environmental expenditures primarily at Gary Works, and
certain spending related to the Gary Works No. 13 blast furnace.  Contract
commitments for capital expenditures at September 30, 1996 were $168 million,
compared with $178 million at year-end 1995.

     Future capital expenditures can be affected by levels of cash flow from
operations, and by unforeseen hazards such as weather conditions, or explosions
or fires, which could delay the timing of completion of particular capital
projects.

     Financial obligations increased $171 million in first nine months of 1996
primarily reflecting net cash used in operating and investing activities.  These
financial obligations consist of the U. S. Steel Group's portion of USX debt and
preferred stock of a subsidiary attributed to all three groups, as well as debt
and financing agreements specifically attributed to the U. S. Steel Group.

Liquidity
- ---------
     For discussion of USX's liquidity and capital resources, see USX
Consolidated Management's Discussion and Analysis of Financial Condition and
Results of Operations.

Environmental Matters, Contingencies and Commitments
- ----------------------------------------------------
     The U. S. Steel Group has incurred and will continue to incur substantial
capital, operating and maintenance, and remediation expenditures as a result of
environmental laws and regulations.  In recent years, these expenditures have
been mainly for process changes in order to meet Clean Air Act obligations,
although ongoing compliance costs have also been significant.  To the extent
these expenditures, as with all costs, are not ultimately reflected in the
prices of the U. S. Steel Group's products and services, operating results will
be adversely affected.  The U. S. Steel Group believes that all of its domestic
competitors are subject to similar environmental laws and regulations.  However,
the specific impact on each competitor may vary depending on a number of
factors, including the age and location of its operating facilities and its
production methods.

     USX has been notified that it is a potentially responsible party ("PRP") at
28 waste sites related to the U. S. Steel Group under the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA") as of
September 30, 1996.  In addition, there are 17 sites related to the U. S. Steel
Group where USX has received information requests or other indications that USX
may be a PRP under CERCLA but where sufficient information is not presently
available to confirm the existence of

<PAGE> 49

                      U. S. STEEL GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

liability or make any judgment as to the amount thereof.  There are also 36
additional sites related to the U. S. Steel Group where remediation is being
sought under other environmental statutes, both federal and state, or where
private parties are seeking remediation through discussions or litigation.  At
many of these sites, USX is one of a number of parties involved and the total
cost of remediation, as well as USX's share thereof, is frequently dependent
upon the outcome of investigations and remedial studies.  Certain current and
former U. S. Steel Group operating facilities have been in operation for many
years, and could require significant expenditures to meet existing and future
requirements under these laws.  The U. S. Steel Group accrues for environmental
remediation activities when the responsibility to remediate is probable and the
amount of associated costs is reasonably determinable.  As environmental
remediation matters proceed toward ultimate resolution or as additional
remediation obligations arise, charges in excess of those previously accrued may
be required.

     USX is the subject of, or a party to, a number of pending or threatened
legal actions, contingencies and commitments relating to the U. S. Steel Group
involving a variety of matters, including laws and regulations relating to the
environment (see Note 10 to the U. S. Steel Group Financial Statements for a
discussion of certain of these matters).  In the U.S. District Court for the
Northern District of Alabama, in a civil class action, Cox, et al. v. USX, the
United Steel Workers of America and United States Steel and Carnegie Pension
Fund (defendants), a jury on October 29, 1996, returned verdicts favorable to
the defendants on all counts, finding no liability and no damages.  Plaintiffs
have indicated an intent to appeal these verdicts.

     The ultimate resolution of these contingencies could, individually or in
the aggregate, be material to the U. S. Steel Group financial statements.
However, management believes that USX will remain a viable and competitive
enterprise even though it is possible that these contingencies could be resolved
unfavorably to the U. S. Steel Group.  See discussion of Cash Flows and
Liquidity in USX Consolidated Management's Discussion and Analysis of Financial
Condition and Results of Operations.

<PAGE> 50
                      U. S. STEEL GROUP OF USX CORPORATION
                             SUPPLEMENTAL STATISTICS
                      ------------------------------------

<TABLE>
<CAPTION>

                                                Third Quarter    Nine Months
                                                    Ended           Ended
                                                 September 30    September 30
(Dollars in millions)                            1996    1995    1996     1995
- --------------------------------------------------------------------------------
<S>                                             <C>     <C>     <C>      <C>
REVENUES

 Steel and Related Businesses (a)               $1,595  $1,607  $4,738   $4,769
 Other                                              16      13      44       58
                                                ------ -------  ------  -------
   Total U. S. Steel Group                      $1,611  $1,620  $4,782   $4,827


OPERATING INCOME

 Steel and Related Businesses (a)                  $58    $124     $45     $329
 Administrative and Other Businesses(b)             45      21     140       86
                                                ------  ------  ------   ------
   Total U. S. Steel Group                        $103    $145    $185     $415


CAPITAL EXPENDITURES                               $91     $82    $249     $224

OPERATING STATISTICS

 Public & Affiliated Steel Shipments (c)         2,699   2,851   8,255    8,330
 Raw Steel-Production (c)                        2,550   3,036   8,245    8,999
 Raw Steel-Capability Utilization (d)            79.2%   96.4%     86%    96.3%


<FN>

  (a) Includes the production and sale of steel products, coke and taconite
      pellets; domestic coal mining; the management of mineral resources; and
      engineering and consulting services and technology licensing.

  (b) Includes pension credits, other postretirement benefit costs and certain
      other expenses principally attributable to former business units of the
      U. S. Steel Group.  Also includes results of real estate development and
      management, and leasing and financing activities.

  (c) Thousands of net tons.

  (d) Based on annual raw steel production capability of 12.8 million tons for
      1996 and 12.5 million tons for 1995.
</TABLE>


<PAGE> 51

Part I - Financial Information (Continued):

<TABLE>
   D.  Delhi Group
                         DELHI GROUP OF USX CORPORATION
                       STATEMENT OF OPERATIONS (Unaudited)
                       -----------------------------------
<CAPTION>
                                                Third Quarter    Nine Months
                                                    Ended           Ended
                                                 September 30    September 30
(Dollars in millions, except per share data)     1996   1995*    1996    1995*
- --------------------------------------------------------------------------------
<S>                                           <C>     <C>     <C>      <C>
REVENUES                                        $242.0  $149.0  $726.5   $425.8

OPERATING COSTS:
 Cost of sales (excludes items shown below)      222.9   136.9   663.9    376.7
 Selling, general and administrative expenses      7.0     6.1    20.9     18.3
 Depreciation, depletion and amortization          7.0     6.2    20.7     18.8
 Taxes other than income taxes                     1.9     1.8     5.9      5.7
 Restructuring credits                               -       -       -     (6.2)
                                                ------  ------  ------   ------
   Total operating costs                         238.8   151.0   711.4    413.3
                                                ------  ------  ------   ------
OPERATING INCOME (LOSS)                            3.2    (2.0)   15.1     12.5

Other income                                         -       -      .2      5.2
Interest and other financial costs                (5.1)   (4.3)  (15.3)   (10.9)
                                                ------  ------  ------   ------
INCOME (LOSS) BEFORE INCOME TAXES AND
 EXTRAORDINARY LOSS                               (1.9)   (6.3)      -      6.8

Less provision (credit) for estimated
 income taxes                                      (.7)   (2.2)      -      4.4
                                                ------  ------  ------   ------
INCOME (LOSS) BEFORE EXTRAORDINARY LOSS           (1.2)   (4.1)      -      2.4
Extraordinary loss, net of income tax                -     (.2)      -      (.2)
                                                ------  ------  ------   ------
NET INCOME (LOSS)                                 (1.2)   (4.3)      -      2.2

Dividends on preferred stock                         -     (.1)      -      (.2)
Net income applicable to Retained Interest           -       -       -     (2.4)
                                                ------  ------  ------   ------
NET INCOME (LOSS) APPLICABLE TO OUTSTANDING
 DELHI STOCK                                     $(1.2)  $(4.4)     $-     $(.4)
                                                ======  ======  ======   ======

DELHI STOCK DATA:
 Net income (loss) per share -
  Primary and fully diluted:
   Income (loss) before extraordinary loss       $(.14)  $(.44)     $-    $(.02)
   Extraordinary loss                                -    (.02)      -     (.02)
   Net income (loss)                              (.14)   (.46)      -     (.04)

 Dividends paid per share                          .05     .05     .15      .15

 Weighted average shares, in thousands
   - Primary and fully diluted                   9,448   9,443   9,448    9,440
<FN>
*Certain amounts have been reclassified to conform to 1996 classifications.

Selected notes to financial statements appear on pages 54-57.
</TABLE>


<PAGE> 52

<TABLE>
                         DELHI GROUP OF USX CORPORATION
                            BALANCE SHEET (Unaudited)
                         ------------------------------
<CAPTION>
                                        
                                                   September 30 December 31
(Dollars in millions)                                  1996         1995
- --------------------------------------------------------------------------------
<S>                                                   <C>           <C>
ASSETS
Current assets:
  Cash and cash equivalents                              $.5          $1.9
  Receivables, less allowance for doubtful
   accounts of $.8 and $.8                              71.4          93.2
  Receivable from other groups                            .7            .3
  Inventories                                           10.2          10.7
  Other current assets                                   3.6           3.2
                                                      ------        ------
     Total current assets                               86.4         109.3
Long-term receivables and other investments              6.3           8.3
Property, plant and equipment, less accumulated
 depreciation, depletion and amortization of
 $448.1 and $433.9                                     536.9         502.3
Other noncurrent assets                                  5.1           4.4
                                                      ------        ------
     Total assets                                     $634.7        $624.3
                                                      ======        ======
LIABILITIES
Current liabilities:
  Notes payable                                        $14.1          $1.6
  Accounts payable                                     124.9         137.7
  Payable to other groups                                  -            .1
  Payroll and benefits payable                           3.9           3.8
  Accrued taxes                                          8.3           7.0
  Accrued interest                                       3.3           4.9
  Long-term debt due within one year                     9.1          18.8
                                                      ------        ------
     Total current liabilities                         163.6         173.9
Long-term debt, less unamortized discount              204.0         182.0
Long-term deferred income taxes                        135.9         135.9
Deferred credits and other liabilities                  16.6          16.5
Preferred stock of subsidiary                            3.8           3.8
                                                      ------        ------
     Total liabilities                                 523.9         512.1


STOCKHOLDERS' EQUITY                                   110.8         112.2
                                                      ------        ------
     Total liabilities and stockholders' equity       $634.7        $624.3
                                                      ======        ======








<FN>
Selected notes to financial statements appear on pages 54-57.
</TABLE>


<PAGE> 53

<TABLE>
                         DELHI GROUP OF USX CORPORATION
                       STATEMENT OF CASH FLOWS (Unaudited)
                       -----------------------------------
<CAPTION>
                                        
                                                       Nine Months Ended
                                                          September 30
(Dollars in millions)                                  1996         1995
- --------------------------------------------------------------------------------
<S>                                                   <C>           <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
OPERATING ACTIVITIES:
Net income                                                $-          $2.2
Adjustments to reconcile to net cash provided from
 (used in) operating activities:
  Extraordinary loss                                       -            .2
  Depreciation, depletion and amortization              20.7          18.8
  Pensions                                                .7            .4
  Deferred income taxes                                    -            .7
  Gain on disposal of assets                             (.5)          (.5)
  Payment of amortized discount on zero coupon debentures  -          (4.4)
  Restructuring credits                                    -          (6.2)
  Changes in:
     Current receivables - sold                            -         (18.3)
                        - operating turnover             18.4        (10.5)
     Inventories                                          .5           1.2
     Current accounts payable and accrued expenses     (11.5)         12.3
  All other items - net                                  2.2          (3.7)
                                                      ------        ------
     Net cash provided from (used in)
      operating activities                              30.5          (7.8)
                                                      ------        ------
INVESTING ACTIVITIES:
Capital expenditures                                   (55.4)        (24.9)
Disposal of assets                                        .6          12.7
All other items - net                                      -           3.5
                                                      ------        ------
     Net cash used in investing activities             (54.8)         (8.7)
                                                      ------        ------
FINANCING ACTIVITIES:
Increase in Delhi Group's share of
 USX consolidated debt                                  24.3          79.2
Elimination of Marathon Group Retained Interest            -         (58.2)
Preferred stock redeemed                                   -          (2.5)
Dividends paid                                          (1.4)         (1.5)
Payment attributed to Retained Interest                    -           (.5)
                                                      ------        ------
     Net cash provided from financing activities        22.9          16.5
                                                      ------        ------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS    (1.4)            -
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR           1.9            .1
                                                      ------        ------
CASH AND CASH EQUIVALENTS AT END OF PERIOD               $.5           $.1
                                                      ======        ======
Cash used in operating activities included:
  Interest and other financial costs paid             $(16.6)       $(14.9)
  Income taxes paid, including settlements with
   other groups                                          (.2)         (4.1)


<FN>
Selected notes to financial statements appear on pages 54-57.
</TABLE>


<PAGE> 54

                         DELHI GROUP OF USX CORPORATION
                     SELECTED NOTES TO FINANCIAL STATEMENTS
                     --------------------------------------
                                   (Unaudited)
                                        

 1.  The information furnished in these financial statements is unaudited but,
     in the opinion of management, reflects all adjustments necessary for a fair
     presentation of the results for the periods covered.  All such adjustments
     are of a normal recurring nature unless disclosed otherwise.  These
     financial statements, including selected notes, have been prepared in
     accordance with the applicable rules of the Securities and Exchange
     Commission and do not include all of the information and disclosures
     required by generally accepted accounting principles for complete financial
     statements.  Additional information is contained in the USX Annual Report
     on Form 10-K for the year ended December 31, 1995.

 2.  The financial statements of the Delhi Group include the financial position,
     results of operations and cash flows for the businesses of Delhi Gas
     Pipeline Corporation and certain other subsidiaries of USX, and a portion
     of the corporate assets and liabilities and related transactions which are
     not separately identified with ongoing operating units of USX.  These
     financial statements are prepared using amounts included in the USX
     consolidated financial statements.  Corporate amounts reflected in these
     financial statements are determined based upon methods which management
     believes to be reasonable.  The accounting policies applicable to the
     preparation of the financial statements of the Delhi Group may be modified
     or rescinded in the sole discretion of the Board of Directors of USX
     (Board), although the Board has no present intention to do so.  The Board
     may also adopt additional policies depending on the circumstances.

     On June 15, 1995, USX eliminated the Marathon Group's Retained Interest in
     the Delhi Group (equivalent to 4,564,814 shares of USX-Delhi Group Common
     Stock (Delhi Stock)).  This was accomplished through a reallocation of
     assets and a corresponding adjustment to debt and equity attributed to the
     Delhi and Marathon Groups.  The transfer was made at a price of $12.75 per
     equivalent share of Delhi Stock, or an aggregate of $58.2 million.  The
     Retained Interest represented the Marathon Group's interest in the earnings
     and equity of the Delhi Group.  Prior to the elimination, the Retained
     Interest was approximately 33%, based on the 14,003,205 shares of Delhi
     Stock designated by the Board to represent 100% of the common stockholders'
     equity value of USX attributable to the Delhi Group.

     Although the financial statements of the Delhi Group, the Marathon Group
     and the U. S. Steel Group separately report the assets, liabilities
     (including contingent liabilities) and stockholders' equity of USX
     attributed to each such group, such attribution of assets, liabilities
     (including contingent liabilities) and stockholders' equity among the Delhi
     Group, the Marathon Group and the U. S. Steel Group for the purpose of
     preparing their respective financial statements does not affect legal title
     to such assets and responsibility for such liabilities.  Holders of Delhi
     Stock, USX-Marathon Group Common Stock (Marathon Stock) and USX-U. S. Steel
     Group Common Stock (Steel Stock) are holders of common stock of USX, and
     continue to be subject to all the risks associated with an investment in
     USX and all of its


<PAGE> 55

                         DELHI GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)
                                        
                                        
 2.  (Continued)

     businesses and liabilities.  Financial impacts arising from one Group that
     affect the overall cost of USX's capital could affect the results of
     operations and financial condition of other groups.  In addition, net
     losses of any Group, as well as dividends and distributions on any class of
     USX Common Stock or series of Preferred Stock and repurchases of any class
     of USX Common Stock or series of Preferred Stock at prices in excess of par
     or stated value, will reduce the funds of USX legally available for payment
     of dividends on all classes of Common Stock.  Accordingly, the USX
     consolidated financial information should be read in connection with the
     Delhi Group financial information.

 3.  The method of calculating net income (loss) per share for the Delhi Stock,
     Marathon Stock and Steel Stock reflects the Board's intent that the
     separately reported earnings and surplus of the Delhi Group, the Marathon
     Group and the U. S. Steel Group, as determined consistent with the USX
     Certificate of Incorporation, are available for payment of dividends on the
     respective classes of stock, although legally available funds and
     liquidation preferences of these classes of stock do not necessarily
     correspond with these amounts.

     Primary net income (loss) per share is calculated by adjusting net income
     for dividend requirements of preferred stock and income that was applicable
     to the Retained Interest and is based on the weighted average number of
     common shares outstanding plus common stock equivalents, provided they are
     not antidilutive.  Common stock equivalents result from assumed exercise of
     stock options, where applicable.

     Fully diluted net income (loss) per share assumes exercise of stock
     options, provided the effect is not antidilutive.

 4.  In 1994, restructuring charges totaling $39.9 million were reported for the
     write-down of assets to estimated net realizable value related to the
     planned disposition of certain nonstrategic gas gathering and processing
     assets and other investments.  In the second quarter of 1995, disposition
     of these assets was completed at higher than anticipated sales proceeds,
     resulting in restructuring credits of $11.2 million ($6.2 million included
     in operating income and $5.0 million included in other income).

 5.  The financial statement provision for estimated income taxes and related
     tax payments or refunds have been reflected in the Delhi Group, the
     Marathon Group and the U. S. Steel Group financial statements in accordance
     with USX's tax allocation policy for such groups.  In general, such policy
     provides that the consolidated tax provision and related tax payments or
     refunds are allocated among the Delhi Group, the Marathon Group and the U.
     S. Steel Group for group financial statement purposes, based principally
     upon the financial income, taxable income, credits, preferences and other
     amounts directly related to the respective groups.

<PAGE> 56

                         DELHI GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)


 5.  (Continued)

     The provision (credit) for estimated income taxes for the Delhi Group is
     based on tax rates and amounts which recognize management's best estimate
     of current and deferred tax assets and liabilities.  Differences between
     the combined interim tax provisions of the Delhi, the Marathon and the U.
     S. Steel Groups and USX consolidated are allocated to each group based on
     the relationship of the individual group provisions to the combined interim
     provisions.

 6.  In the third quarter of 1995, USX extinguished $467 million of debt prior
     to maturity, resulting in an extraordinary loss to the Delhi Group of $.2
     million, net of a $.1 million income tax benefit.

 7.  Inventories are carried at lower of average cost or market.

<TABLE>
<CAPTION>
                                                         (In millions)
                                                    ------------------------
                                                   September 30 December 31
                                                       1996         1995
                                                   ------------ -----------
    <S>                                                <C>          <C>
    Natural gas in storage                              $5.9         $9.4
    Natural gas liquids (NGLs) in storage                 .4           .2
    Materials and supplies                               3.9          1.1
                                                        ----         ----
      Total                                            $10.2        $10.7
                                                       =====        =====
</TABLE>

 8.  The Delhi Group participates in an agreement (the program) to sell an
     undivided interest in certain accounts receivable subject to limited
     recourse.  Payments are collected from the sold accounts receivable; the
     collections are reinvested in new accounts receivable for the buyers; and a
     yield, based on defined short-term market rates, is transferred to the
     buyers.  At September 30, 1996, the amount sold under the program that had
     not been collected was $50.0 million, which will be forwarded to the buyers
     at the end of the agreement, or in the event of earlier contract
     termination.  If the Delhi Group does not have a sufficient quantity of
     eligible accounts receivable to reinvest in for the buyers, the size of the
     program will be reduced accordingly.  The buyers have rights to a pool of
     receivables that must be maintained at a level of 110% of the program size.

 9.  USX is the subject of, or a party to, a number of pending or threatened
     legal actions, contingencies and commitments relating to the Delhi Group
     involving a variety of matters, including laws and regulations relating to
     the environment.  Certain of these matters are discussed below.  The
     ultimate resolution of these contingencies could, individually or in the
     aggregate, be material to the Delhi Group financial statements.  However,
     management believes that USX will remain a viable and competitive
     enterprise even though it is possible that these contingencies could be
     resolved unfavorably to the Delhi Group.  See discussion of Liquidity in
     USX Consolidated Management's Discussion and Analysis of Financial
     Condition and Results of Operations.

     The Delhi Group is subject to federal, state and local laws and regulations
     relating to the environment.  These laws generally provide for control of
     pollutants released into the environment and require responsible parties to
     undertake remediation of hazardous waste disposal sites.  Penalties may be
     imposed for noncompliance.  Expenditures for remediation and penalties have
     not been material.

<PAGE> 57

                         DELHI GROUP OF USX CORPORATION
               SELECTED NOTES TO FINANCIAL STATEMENTS (Continued)
               --------------------------------------------------
                                   (Unaudited)


 9.  (Continued)

     For a number of years, the Delhi Group has made capital expenditures to
     bring existing facilities into compliance with various laws relating to the
     environment.  In the first nine months of 1996 and for the years 1995 and
     1994, such capital expenditures totaled $5.7 million, $5.5 million and
     $4.6 million, respectively.  The Delhi Group anticipates making additional
     such expenditures in the future; however, the exact amounts and timing of
     such expenditures are uncertain because of the continuing evolution of
     specific regulatory requirements.

     At September 30, 1996, contract commitments for the Delhi Group's capital
     expenditures for property, plant and equipment totaled $5.5 million
     compared with $9.3 million at December 31, 1995.


<PAGE> 58
                         DELHI GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     The Delhi Group includes Delhi Gas Pipeline Corporation ("DGP") and certain
other subsidiaries of USX Corporation ("USX") which are engaged in the
purchasing, gathering, processing, transporting and marketing of natural gas.
The following discussion should be read in conjunction with the third quarter
1996 USX consolidated financial information and the Delhi Group financial
statements and selected notes.  In addition, the discussion of Results of
Operations should be read in conjunction with the Supplemental Statistics
provided on page 63.

Certain sections of the discussion include forward-looking statements concerning
trends or events potentially affecting the businesses of the Delhi Group.  These
statements typically contain words such as "anticipates", "believes",
"estimates", or "expects", or similar words indicating that future outcomes are
uncertain.  In accordance with "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, these statements are accompanied by
cautionary language identifying important factors, though not necessarily all
such factors, that could cause future outcomes to differ materially from those
set forth in forward-looking statements.  USX included in a  Form 8-K dated
October 23, 1996, cautionary language identifying important factors with respect
to written forward-looking statements in USX external documents, and oral
forward-looking statements made by, or on behalf of USX, its representative and
its individual Groups.

Results of Operations
- ---------------------
     Revenues in the third quarter and first nine months of 1996 increased
$93.0 million and $300.7 million, respectively, from comparable periods in 1995,
as summarized in the following table:

<TABLE>
<CAPTION>
                                                Third Quarter    Nine Months
                                                    Ended           Ended
                                                 September 30    September 30
(Dollars in millions)                            1996    1995    1996     1995
- --------------------------------------------------------------------------------
<S>                                             <C>     <C>     <C>      <C>
Gas Sales and Trading                           $212.9 $ 128.9  $645.3   $364.5
Transportation                                     4.0     3.1    12.5      8.5
Gas Processing                                    23.9    17.0    63.7     52.3
Other                                              1.2       -     5.0       .5
                                                ------  ------  ------   ------
Total Revenues                                  $242.0  $149.0  $726.5   $425.8
                                                ======  ======  ======   ======
</TABLE>

     The increases were primarily due to higher natural gas prices and increased
trading volumes, partially offset by lower natural gas sales volumes.

     Operating income in the third quarter of 1996 increased by $5.2 million as
compared with the third quarter of 1995.  Operating income in the first nine
months of 1996 increased by $2.6 million as compared with the first nine months
of 1995.  The first nine months of 1995 included a $6.2 million favorable pretax
effect related to completion of a 1994 nonstrategic asset disposition plan.
Excluding this effect, operating income in the first nine months of 1996
increased by $8.8 million from the comparable prior-year period.  This increase
was due primarily to improved gas sales and trading unit margins and increased
transportation volumes, partially offset by decreases in natural gas and NGLs
sales volumes, and higher natural gas processing feedstock costs.


<PAGE> 59
                         DELHI GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

      Gas sales and trading gross margins benefited from higher gas sales prices
which resulted in increased unit margins in the third quarter of 1996, as
compared with the third quarter of 1995.  Gas sales and trading gross margin in
the first quarter and first nine months of 1996 reflected an estimated $2.9
million unfavorable effect of a previously disclosed market anomaly caused by
extreme winter weather in the eastern United States and the inability to move
Texas gas to that market due to transportation constraints.  Gas sales volumes
declined by 3% and 6%, respectively in the third quarter and first nine months
of 1996, from the comparable prior-year periods, as some gas sales volumes were
converted to transportation volumes.  Natural gas trading involves the purchase
of natural gas from sources other than wells directly connected to the Delhi
Group's systems and the subsequent sale of like volumes.  The cost of natural
gas acquired through trading is typically higher than the cost of natural gas
acquired from wells directly connected to the Delhi Group's systems.  Natural
gas trading volumes in the third quarter and first nine months of 1996 increased
24% and 67%, respectively, from the comparable prior-year periods.

     The transportation business involves the transport of natural gas on
Delhi's systems for third parties at negotiated fees.  Transportation gross
margin in the third quarter and first nine months of 1996 increased by $0.8
million, or 25%, and $4.0 million, or 47%, respectively, from the comparable
prior-year periods, due primarily to increases in transportation volumes
resulting from new transportation agreements and conversion of some gas sales
volumes to transportation volumes.

     Natural gas processing involves extraction of NGLs such as ethane, propane,
isobutane, normal butane and natural gasoline from the natural gas stream.  Gas
processing gross margin in the third quarter of 1996 increased by $1.1 million,
or 16%, as compared with the third quarter of 1995, primarily as the result of
higher NGLs sales prices.  Gas processing gross margin in the first nine months
of 1996 decreased by $1.2 million, or 6%, from the comparable 1995 period,
mainly due to higher natural gas processing feedstock costs and decreased NGLs
sales volumes.

     Other income in the first nine months of 1996 decreased by $5.0 million
from the comparable prior-year period, primarily reflecting a $5.0 million
favorable adjustment recorded in 1995 on the sale of the Delhi Group's interest
in Ozark Gas Transmission System ("Ozark") (see Note 4 to the Delhi Group
financial statements for details).

     Interest and other financial costs increased $4.4 million in the first nine
months of 1996 as compared with the first nine months of 1995.  This was due
to increased debt levels that primarily resulted from the second quarter 1995
elimination of the Marathon Group's Retained Interest (see Note 2 to the Delhi
Group financial statements for details), and capital spending in excess of cash
provided from operating activities.

     The provision (credit) for estimated income taxes  for the first nine
months of 1995 included an unfavorable effect associated with the sale of the
Delhi Group's interest in Ozark.

     A Net loss of $1.2 million, or $.14 per share, was recorded in the third
quarter of 1996, compared with a net loss of $4.3 million, or $.46 per share, in
the third quarter of 1995.  Net income was at break-even the first nine months
of 1996, compared with $2.2 million in the first nine months of 1995.  The
changes in net income primarily reflect the improvements in operating income
discussed above, offset by the increased interest and other financial costs
related to the

<PAGE> 60
                         DELHI GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

elimination of the Marathon Group's Retained Interest and the increased levels
of capital spending.

Outlook
- -------
     The Delhi Group continues to expand its natural gas pipeline systems and
treating and processing facilities through acquisitions and expansions of
existing facilities.  The Delhi Group is currently involved in significant
projects in East and West Texas, the largest being the expansion in the Pinnacle
Reef gas play area of East Texas.  Management anticipates fourth quarter peak
rates will reach 130 to 140 mmcfd, primarily representing transportation
throughput volumes, as these projects are completed and integrated into the
existing systems.  A significant portion of this additional transportation
throughput volume is related to long-term transportation agreements, at
prevailing market rates, between the Delhi Group and the Marathon Group.  The
realization of these additional volumes could be affected by many factors,
including but not limited to, the success of drilling by the producers in the
Pinnacle Reef gas play area, the level of drilling in this area, and other areas
of the United States, levels of imported gas, storage levels, and changes in the
price and demand for natural gas.

     The Delhi Group's operating results from gas sales are affected by
fluctuations in natural gas prices and demand levels in the markets that it
serves.  The levels of gas sales and trading gross margins for future periods
are affected by fluctuations in customer demand for premium services,
competition in attracting new premium customers and the volatility of natural
gas prices.  The Delhi Group attempts to sell all of the natural gas available
on its system each month.  Natural gas volumes not sold to its premium markets
are typically sold in the spot market, generally at lower average unit margins
than those realized from premium sales.  Because the strongest demand for gas
and the highest gas sales unit margins generally occur during the winter heating
season, the Delhi Group has historically recognized the greatest portion of
income from its gas sales business during the first and fourth quarters of the
year.

     Since the adoption of Federal Energy Regulatory Commission ("FERC") Order
No. 636 in 1992, competition in the domestic gas industry has increased
significantly.  On the supply side, gas producers now have easier access to end-
user sales markets, which, at times, has resulted in the conversion of their gas
sales contracts with midstream gathering and distribution companies, like DGP,
to lower gross margin, fixed-fee transportation agreements.  On the sales side,
securing new premium service agreements has become increasingly difficult.
However, management believes that its increased focus on core operating areas, a
continued emphasis on sour gas gathering and treating services and its ability
to maintain a long-term dedicated reserve base and to provide reliable sales
service will enable the Delhi Group to remain a competitive entity in the
markets that it serves.

     The Delhi Group monitors the economics of removing NGLs from the gas stream
for processing on an ongoing basis to determine the appropriate level of each
gas plant's operation.  The levels of gas processing margin for future periods
are affected by fluctuations in the price and demand for NGLs and the volatility
of natural gas processing feedstock costs.  In the third quarter of 1996, Delhi
began hedging NGLs sales and their related feedstock costs.  Approximately 85%
of anticipated fourth quarter NGLs volumes have been hedged.


<PAGE> 61
                         DELHI GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

Cash Flows
- ----------
     Net cash provided from operating activities increased $38.3 million in the
first nine months of 1996, compared with the first nine months of 1995.  Cash
flows in 1995 included a $4.4 million payment, representing the Delhi Group's
share of the amortized discount on USX's zero coupon bond debentures which were
extinguished in the third quarter.  The improvement primarily reflected positive
changes in working capital and increased gross margins in the first nine months
of 1996, while the first nine months of 1995 included an $18.3 million
unfavorable effect of a change in the sale of receivables program.

     Capital expenditures for property, plant and equipment in the third quarter
and first nine months of 1996 were $13.5 million and $55.4 million,
respectively, compared with $12.2 million and $24.9 million in the respective
1995 periods.  Expenditures in the first nine months of 1996 were primarily for
the Pinnacle Reef expansion project in East Texas and the acquisition of
pipeline and processing assets in West Texas.  Capital expenditures for the year
1996 are expected to approximate $75 million.  The Delhi Group will continue to
target additional expenditures to add new dedicated gas reserves, expand
existing facilities and acquire new facilities as opportunities arise in its
core operating areas.  Future capital expenditures can be affected by changes in
the price and demand for natural gas, levels of cash flow from operations, the
success and level of drilling activity by producers, severe weather or natural
disasters, or unforeseen operating difficulties, which could delay the timing of
completion of particular capital projects.  Contract commitments for capital
expenditures were $5.5 million at September 30, 1996, compared with $9.3 million
at year-end 1995.

     Cash from the disposal of assets decreased $12.1 million in the first nine
months of 1996, compared with the first nine months of 1995.  The 1995 proceeds
mainly reflected the sales of remaining assets in the 1994 asset disposition
plan.

     Financial obligations increased by $24.3 million in the first nine months
of 1996 as capital expenditures exceeded net cash provided from operating
activities.  Financial obligations consist of the Delhi Group's portion of USX
debt and preferred stock of a subsidiary attributed to all three groups.

Liquidity
- ---------
     For discussion of USX's liquidity and capital resources, see USX
Consolidated Management's Discussion and Analysis of Financial Condition and
Results of Operations.

Environmental Matters, Contingencies and Commitments
- ----------------------------------------------------
     The Delhi Group has incurred and will continue to incur capital and
operating and maintenance expenditures as a result of environmental laws and
regulations.  To the extent these expenditures, as with all costs, are not
ultimately reflected in the prices of the Delhi Group's products and services,
operating results will be adversely affected.  The Delhi Group believes that
substantially all of its competitors are subject to similar environmental laws
and regulations.  However, the specific impact on each competitor may vary
depending on a number of factors, including the age and location of its
operating facilities and its production processes.


<PAGE> 62
                         DELHI GROUP OF USX CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

     USX is the subject of, or a party to, a number of pending or threatened
legal actions, contingencies and commitments relating to the Delhi Group
involving a variety of matters, including laws and regulations relating to the
environment.  The ultimate resolution of these contingencies could, individually
or in the aggregate, be material to the Delhi Group financial statements.
However, management believes that USX will remain a viable and competitive
enterprise even though it is possible that these contingencies could be resolved
unfavorably to the Delhi Group.  See discussion of Cash Flows and Liquidity in
USX Consolidated Management's Discussion and Analysis of Financial Condition and
Results of Operations.

<PAGE> 63

<TABLE>
                         DELHI GROUP OF USX CORPORATION
                             SUPPLEMENTAL STATISTICS
                         ------------------------------
<CAPTION>


                                                Third Quarter    Nine Months
                                                    Ended           Ended
                                                 September 30    September 30
(Dollars in millions)                            1996    1995    1996     1995
- --------------------------------------------------------------------------------
<S>                                            <C>     <C>     <C>      <C>
GROSS MARGIN

 Gas Sales and Trading Margin                    $11.5    $8.1   $44.3   $38.0
 Transportation Margin                             4.0     3.2    12.5     8.5
                                                ------  ------  ------   ------
 Systems and Trading Margin                       15.5    11.3    56.8    46.5
 Gas Processing Margin                             7.8     6.7    18.6    19.8
                                                ------  ------  ------   ------
 Total Gross Margin                              $23.3   $18.0   $75.4   $66.3

OPERATING INCOME (LOSS)                           $3.2   $(2.0)  $15.1   $12.5


CAPITAL EXPENDITURES                             $13.5   $12.2   $55.4   $24.9


OPERATING STATISTICS

Natural Gas Volumes (a)
 Natural Gas Sales                               516.4   531.1   532.9   564.3
 Transportation                                  464.3   316.3   456.5   288.7
                                                ------  ------  ------   ------
    Systems Throughput                           980.7   847.4   989.4   853.0
 Trading Sales                                   589.7   474.6   562.7   336.4
 Partnership - equity share (b)                      -       -       -     6.9
                                               ------- ------- -------  -------
    Total Sales Volumes                        1,570.4 1,322.0 1,552.1  1,196.3

Natural Gas Liquids Sales (c)                    801.3   767.8   764.0   800.5



<FN>
  (a) Millions of cubic feet per day
  (b) Related to an investment which was sold in the second quarter of 1995.
  (c) Thousands of gallons per day
</TABLE>


<PAGE> 64


P
art II - Other Information
- ----------------------------


Item 1. LEGAL PROCEEDINGS

     U. S. Steel Group

     (a)  Fairfield Agreement Litigation

     A civil class action was commenced against USX, the United Steelworkers of
     America and United States Steel and Carnegie Pension Fund in 1989 (Cox, et
     al. v. USX, et al.) that allegedly related to the negotiation of a 1983
     local labor agreement, which resulted in the reopening of USX's Fairfield
     Works in 1984.  The causes of action included claims asserted under the
     Racketeer Influenced and Corrupt Organization Act (RICO) and the Employee
     Retirement Income Security Act (ERISA), specifically alleging that USX
     granted leaves of absence and pensions to union officials with intent to
     influence their approval, implementation and interpretation of the 1983
     Fairfield Agreement.  The defendants denied any liability to the plaintiffs
     and vigorously defended these claims.  On October 29, 1996, a jury returned
     verdicts favorable to the defendants on all counts finding no liability and
     no damages.  Plaintiffs have indicated an intent to appeal these verdicts.


     Other

     Reference is made to the USX Form 10-Q for the periods ended March 31 and
     June 30, 1996, for discussion of legal proceedings relating to the Marathon
     Group (Environmental Proceedings) and the U. S. Steel Group (B&LE
     Litigation, Environmental Proceedings-Gary Works, and the Aloha Stadium
     Litigation).

<PAGE> 65

Part II - Other Information (Continued):
- ----------------------------


Item 5.  OTHER INFORMATION
                                        
      SUMMARIZED CONSOLIDATED FINANCIAL INFORMATION OF MARATHON OIL COMPANY
                               Supplementary Data
      ---------------------------------------------------------------------
                                   (Unaudited)



The following summarized consolidated financial information of Marathon Oil
Company, a wholly owned subsidiary of USX, is included in this Form 10-Q in
satisfaction of the reporting obligation of Marathon which has debt securities
registered under the Securities Exchange Act.  All such securities are
guaranteed by USX.

<TABLE>
<CAPTION>
                                                  (In millions)
                                         -------------------------------
                                                Third Quarter    Nine Months
                                                    Ended           Ended
                                                 September 30    September 30
                                                 1996    1995    1996     1995
                                                 ----    ----    ----     ----
INCOME DATA:
<S>                                             <C>    <C>     <C>     <C>
Revenues                                        $4,186 $3,477* $11,859 $10,307*
Operating income                                   323    181*     945     657*
Income before extraordinary loss                     -     78        -     235
Net income                                         156     75      471     232

<FN>
*Reclassified to conform to 1996 classifications.
</TABLE>


<TABLE>
                                                         (In millions)
                                                   -------------------------
                                                   September 30 December 31
                                                       1996         1995
                                                   ------------ -----------
<S>                                                  <C>           <C>
BALANCE SHEET DATA:
Assets:
Current assets                                        $3,143        $2,656
Noncurrent assets                                      7,883         8,088
                                                      ------        ------
Total assets                                         $11,026       $10,744
                                                      ======        ======

Liabilities and Stockholder's Equity:
Current liabilities                                   $1,836        $1,659
Noncurrent liabilities                                 7,476         7,842
Stockholder's equity                                   1,714         1,243
                                                     -------       -------

Total liabilities and stockholder's equity           $11,026       $10,744
                                                     =======       =======
</TABLE>


<PAGE> 66

Part II - Other Information (Continued):
- ----------------------------


   Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

   (a) EXHIBITS

          12.1 Computation of Ratio of Earnings to Combined Fixed Charges and
               Preferred Stock Dividends

          12.2 Computation of Ratio of Earnings to Fixed Charges

          27.  Financial Data Schedule

   (b) REPORTS ON FORM 8-K

          Form 8-K dated September 24, 1996, reporting under Item 5, Other
          Events, applicability of the "safe harbor" provisions of the Private
          Securities Litigation Reform Act of 1995, to USX
          Corporation - Marathon Group.

          Form 8-K dated October 23, 1996, reporting under Item 5, Other Events,
          applicability of the "safe harbor" provisions of the Private
          Securities Litigation Reform Act of 1995, to USX Corporation,
          the Marathon Group, the U. S. Steel Group and the Delhi Group.

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned chief accounting officer thereunto duly authorized.




      USX CORPORATION



      By /s/ Lewis B. Jones
        ------------------
           Lewis B. Jones
          Vice President &
            Comptroller


November 12, 1996








<TABLE>
<CAPTION>
                                                                    Exhibit 12.1

                                        
                                 USX CORPORATION
           COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
                          AND PREFERRED STOCK DIVIDENDS
                      TOTAL ENTERPRISE BASIS - (Unaudited)
           ----------------------------------------------------------
                              (Dollars in Millions)
                                        
                               Nine Months
                                  Ended           Year Ended December 31
                               September 30  --------------------------------
                                1996   1995   1995   1994    1993   1992   1991
                                ----   ----   ----   ----    ----   ----   ----
<S>                           <C>     <C>     <C>   <C>      <C>    <C>    <C>
Portion of rentals
  representing interest         $60     $60    $78    $85     $84    $87    $91
Capitalized interest              9      10     13     58     105     78     63
Other interest and fixed
  charges                       302     362    464    464     372    408    474
Pretax earnings which would
  be required to cover
  preferred stock dividend
  requirements of parent         27      37     46     49      44     14     15
                               ----    ----   ----   ----    ----   ----   ----
Combined fixed charges
  and preferred stock
  dividends (A)                $398    $469   $601   $656    $605   $587   $643
                               ====    ====   ====   ====    ====   ====   ====
Earnings-pretax income (loss)
  with applicable
  adjustments (B)             $1310   $1245   $902  $1263    $280   $376   $(53)
                               ====    ====   ====   ====    ====   ====   ====

Ratio of (B) to (A)            3.29    2.65   1.50   1.92     (a)    (a)    (a)
                               ====    ====   ====   ====    ====   ====   ====

<FN>
  (a) Earnings did not cover combined fixed charges and preferred stock
      dividends by $325 million for 1993, by $211 million for 1992 and by $696
      million for 1991.

</TABLE>






<TABLE>
<CAPTION>
                                                                    Exhibit 12.2
                                                                                
                                                                                
                                 USX CORPORATION
                COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
                      TOTAL ENTERPRISE BASIS - (Unaudited)
                -------------------------------------------------
                              (Dollars in Millions)
                                        
                               Nine Months
                                  Ended           Year Ended December 31
                               September 30  --------------------------------
                                1996   1995   1995   1994    1993   1992   1991
                                ----   ----  -----   ----    ----   ----   ----
<S>                            <C>    <C>     <C>   <C>      <C>    <C>    <C>
Portion of rentals
  representing interest         $60     $60    $78    $85     $84    $87    $91
Capitalized interest              9      10     13     58     105     78     63
Other interest and fixed
  charges                       302     362    464    464     372    408    474
                                ----   ----   ----  -----    ----   ----   ----
Total fixed charges (A)         $371   $432   $555   $607    $561   $573   $628
                                ====   ====   ====   ====    ====   ====   ====
Earnings-pretax income (loss)
  with applicable
  adjustments (B)              $1310  $1245   $902  $1263    $280   $376   $(53)
                                ====   ====   ====   ====    ====   ====   ====
Ratio of (B) to (A)             3.53   2.88   1.63   2.08     (a)    (a)    (a)
                                ====   ====   ====   ====    ====   ====   ====

<FN>
  (a) Earnings did not cover fixed charges by $281 million for 1993, by $197
      million for 1992 and by $681 million for 1991.
</TABLE>







<TABLE> <S> <C>

<ARTICLE> 5
       
<S>                             <C>
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                          DEC-31-1996
<PERIOD-END>                               SEP-30-1996
<CASH>                                              72
<SECURITIES>                                         0
<RECEIVABLES>                                     1190
<ALLOWANCES>                                        21
<INVENTORY>                                       2055
<CURRENT-ASSETS>                                  3432
<PP&E>                                           25963
<DEPRECIATION>                                   15580
<TOTAL-ASSETS>                                   16851
<CURRENT-LIABILITIES>                             3309
<BONDS>                                              0
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          7
<COMMON>                                           382
<OTHER-SE>                                        4417
<TOTAL-LIABILITY-AND-EQUITY>                     16851
<SALES>                                          17333
<TOTAL-REVENUES>                                 17333
<CGS>                                            16204
<TOTAL-COSTS>                                    16204
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                                 341
<INCOME-PRETAX>                                    930
<INCOME-TAX>                                       278
<INCOME-CONTINUING>                                652
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                       652
<EPS-PRIMARY>                                        0
<EPS-DILUTED>                                        0<F1><F2><F3>
<FN>
<F1>Consists of Marathon Stock issued, $288; Steel Stock issued, $85; Delhi
Stock issued, $9.
<F2>Primary earnings per share applicable to Marathon Stock, $1.75; Steel Stock,
$1.56; Delhi Stock, $-.
<F3>Fully diluted earnings per share applicable to Marathon Stock, $1.74; Steel
Stock, $1.55; Delhi Stock, $-.
</FN>
        

</TABLE>